S&P ups World Acceptance

S&P Global Ratings said it upgraded World Acceptance Corp. back to B from B-. The agency downgraded the company to B- on March 19, 2020, citing increased interest expense on higher borrowings and an increased accrual for the probe into its former Mexico operations.

“World Acceptance’s operating performance has benefitted from strong fiscal stimulus and a decline in a portfolio mix of newer customers. As of Dec. 31, 2020, the company’s year-to-date charge-off rate declined to 14.7% from 17.1% the year prior, and its provision for credit losses as a percentage of revenue declined to 21.3% from 35%. Further, the company was able to amend the covenants on its revolving credit facility, which has substantially improved its covenant cushions, specifically its fixed-charge coverage ratio, which must be at least 275% and is now over 310%,” S&P said in a press release.

The outlook is stable.

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