Fitch Assigns Ratings to OneMain Financial Holdings, LLC

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned a long-term Issuer Default Rating (IDR) of 'B-' to OneMain Financial Holdings, LLC (OneMain) and a 'B/RR3' rating to OneMain's existing senior unsecured debt. The Rating Outlook is Stable.

Today's ratings actions follow the completion of the acquisition of OneMain by Springleaf Holdings Inc., which was subsequently renamed OneMain Holdings Inc. (OneMain Holdings).

KEY RATING DRIVERS - IDR AND SENIOR UNSECURED DEBT

The equalization of OneMain's IDR with those assigned to OneMain Holdings and Springleaf Finance Corporation (SFC) reflects Fitch's view of OneMain as a core subsidiary. OneMain is wholly-owned by OneMain Holdings, with shared management and strategy, and an expectation that operations are to be fully integrated with the legacy Springleaf over the longer term. Also longer-term, capital and funding are expected to be highly fungible throughout the combined organization, once existing OneMain bonds with restrictive covenants have matured or otherwise been retired.

The 'B' rating assigned to OneMain existing senior unsecured debt is one notch higher than OneMain's 'B-' IDR, reflecting Fitch's expectation of above average recoveries for the instruments, as indicated by the Recovery Rating (RR) of 'RR3', which implies a stressed recovery of 51-70%.

The unsecured debt ratings also reflect the restrictive covenants within OneMain's existing bond indenture that limit the level of unsecured indebtedness OneMain can incur and the outflow of capital from OneMain for so long as the existing bonds remain outstanding. As a result, OneMain's stand-alone leverage is expected to remain considerably lower than the consolidated entity. These positive factors are counterbalanced by the ability of the holding company to extract up to 50% of OneMain cumulative net income generated from 4Q'14 in addition to other one-time and annual payments allowable under the bond indenture.

RATING SENSITIVITIES - IDRs AND SENIOR UNSECURED DEBT

OneMain's IDR is equalized with those assigned to OneMain Holdings and SFC and therefore would be expected to move in tandem with any changes in Fitch's view of the consolidated credit risk profile of the overall organization.

Downside risks for the overall organization include the integration of OneMain, elevated leverage, reduced liquidity, refinance risk associated with SFC's 2017 debt maturities and on-going regulatory scrutiny.

Longer-term positive drivers include successful integration of OneMain, de-leveraging improved debt maturity profile, and sustained improvements in profitability and operating performance.

The rating assigned to OneMain's senior unsecured debt is one notch above OneMain's IDR and would be expected to move in tandem with any change in OneMain's IDR, absent a material change in the recovery prospects for the senior unsecured notes, as expressed by the RR, or material changes to OneMain's bond indenture. Were OneMain to incur material additional secured debt, such that the recovery prospects for the senior unsecured notes were viewed as average or below average, this could result in a downgrade of the notes and the RR.

For more information on the key rating drivers and rating sensitivities for the consolidated organization, please see the press release entitled 'Fitch Downgrades Springleaf to 'B-' Following Completion of OneMain Acquisition' dated Nov. 16, 2015.

Fitch has assigned the following ratings:

OneMain Financial Holdings, LLC.

--Long-term IDR 'B-'.

--Senior unsecured debt 'B/RR3'.

The Rating Outlook is Stable.

Additional information is available on www.fitchratings.com

Applicable Criteria

Global Non-Bank Financial Institutions Rating Criteria (pub. 28 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=865351

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=996032

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=996032

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151204005879/en/

Fitch Ratings
Primary Analyst
Tyra Junaid, +1-212-908-0291
Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Nathan Flanders, +1-212-908-0827
Managing Director
or
Committee Chairperson
Joo-Yung Lee, +1-212-908-0560
Managing Director
or
Media Relations
Hannah James, +1-646-582-4947 (New York)
[email protected]

Source: Fitch Ratings

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