4 Finance taps €100m bond to fund expansion, acquisitions

By Daniel Lanyon on Thursday 19 May 2016

Alternative Lending

One of the largest European consumer lending firms 4 Finance has issued a five-year €100m corporate bond in a bid to expand its swelling loans business. The bond is issued at par woth an 11.25 per cent interest rate.

4 Finance, which funds short term loans from its own balance sheet across Europe, has seen strong growth in recent years. It passed a milestone at the start of 2016 in issuing its 10 millionth loan since forming in 2008.

While not yet rated, a spokesman for the 4 Finance group said the newly issued bond is expected to be rated B+ by S&P and B3 by Moody’s, broadly in line with other debt issued by the company in US dollars and Swedish Krona.

4 Finance’s new bond will mature on 23 May 2021 and is expected to be listed on the Frankfurt Stock Exchange’s Open Market on 23 May 2016. An application will be made to list the bonds on the regulated market within 6 months, the spokesman added.

4finance operates through a portfolio of brands across Europe including Vivus, SMSCredit and Zaplo.

Last week was the second best on record in terms of size for European corporate debt issuance thanks in part to the European Central Bank’s imminent extension of its bond buying programme to include more company debt.

The prospect of the central bank, increasing its purchase remit to more corporate credit has elated investors since it was announced early in March 2016, helping to fuel a rally in fixed income markets. ECB president Mario Draghi has previously pledged ‘to do whatever it takes’ to shore up market confidence, boost inflation and economic growth.

Kieran Donnelly, chairman of the management board of 4 Finance said the firm’s issuance included more than 60 new investors from 12 countries across Europe.

“These funds will support our continued growth in Europe, our geographic and product diversification, and potential acquisitions,” he said.

“This five year issue diversifies our funding sources as we build a sustainable business that is fast becoming a global leader in digital consumer finance”. 

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.