KBRA Comments on ECN Capital Corporation’s Strategic Investment in The Kessler Group
May. 14, 2018
NEW YORK--(BUSINESS WIRE)--May 14, 2018--Kroll Bond Rating Agency (KBRA) most recently affirmed the BBB issuer rating with a Stable Outlook for ECN Capital Corporation (TSX: ECN or “ECN Capital”), based in Toronto, Canada, on Nov. 11, 2017. On May 10, 2018, ECN Capital announced the signing of a definitive agreement to make a 70% strategic investment in The Kessler Group (“Kessler”), an advisory and asset management firm focused primarily on the consumer finance industry, for USD$221.2 million in cash. The remaining 30% ownership will be held by Howard Kessler, Chairman & Founder, and Kessler senior management. The transaction is expected to close by the end of the second quarter of 2018.
KBRA believes the Kessler investment is neutral to the rating of ECN as the transaction is in line with management’s strategic vision, is not expected to be funded with additional debt, and will not have a material impact on the firm’s low leverage and strong liquidity profile. The transaction is expected to be accretive to ECN’s operating performance, adding incremental annual operating income of approximately $24.5 million (excluding minority interests, based on fiscal-year 2018 estimate). In addition, the transaction further diversifies revenue with relatively stable fees generated from Kessler’s multi-year contracts and advisory relationships, while also adding contractual revenue.
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KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.
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CONTACT: Kroll Bond Rating Agency
Leah Hallfors, Associate Director
Marjan Riggi, Senior Managing Director
KEYWORD: UNITED STATES NORTH AMERICA CANADA NEW YORK
INDUSTRY KEYWORD: PROFESSIONAL SERVICES BANKING FINANCE
SOURCE: Kroll Bond Rating Agency
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