June 30, 2020
by Moody’s Investors Service
Moody’s Investors Service (“Moody’s”) has completed a periodic review of the ratings of Interswitch Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody’s practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key rating considerations are summarized below
Interswitch’s has been assigned a B2 corporate family rating (CFR). Its B2 issuer rating is based on the B2 CFR and the application of Moody’s Loss Given Default (LGD) analysis for speculative-grade companies.
Interswitch’s B2 CFR captures the secular industry shifts that support the firm’s strong market position in payment services, as well as its solid profitability and liquidity profile, owing to good cash flow generation capacity. These strengths are balanced against the company’s increasing leverage, as the company implements its expansion strategy, and its high operational, regulatory and technological risks. Interswitch’s revenue is mainly derived from Nigeria (B2 negative), which acts as a constraint on Interswitch’s CFR.