Moody’s rates World Acceptance, notes B2

Moody's Investors Service said it assigned a B2 corporate family rating to non-prime consumer lender World Acceptance Corp. and a B3 rating to its proposed $250 million senior unsecured notes.

The outlook is stable.

Moody’s said the B2 corporate family rating reflects World’s strong profitability, low historical earnings volatility, and sound capital position.

The proposed rating also reflects increased regulatory risk in the non-prime/subprime lending sector, exemplified by the CID that World received from the Consumer Financial Protection Bureaulast year that has not yet been resolved.

The rating also incorporates the company's challenges attracting new customers and its resulting reliance on revenues from refinancing existing customer loans, the agency said. A further consideration is the company's relatively undeveloped funding profile, including its reliance on a single syndicated revolving credit facility to fund its operations.

Moody’s noted that the company's proposed issuance of the notes is a positive step in diversifying its funding.

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