S&P upgrades OneMain, Springleaf

S&P said it raised the issuer credit rating on OneMain Holdings Inc. to BB- from B+, along with its rated subsidiary Springleaf Finance Corp. to BB- from B+.

The agency also said it raised the ratings on Springleaf's senior unsecured debt to BB- and AGFC Capital Trust preferred stock to B-.

The outlook is stable.

The stable outlook reflects an expectation that OneMain will continue to lower leverage while maintaining its existing funding mix and similar net charge-off rates.

The upgrades reflect an expectation that OneMain will lower leverage to 4.5x to 4.75x debt-to-adjusted total equity on a sustained basis while net charge-offs remain at less than 6.5%, S&P said.

Since the Springleaf acquisition of OneMain in 2015, the company has retained its earnings to build equity, not paid any dividend and reduced leverage to its target of 7x, S&P explained.

In 2019, OneMain plans to use part of excess cash flows to pay an annual dividend of about $135 million and reduce leverage toward the management target of 6x, the agency said.

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