Intrum: A Servicer of Bad Debts Reckons with Its Own Debt

Listed on the Nasdaq Stockholm Exchange since 2002, Intrum AB (publ) (Intrum) is a Swedish credit management company with wide-ranging expertise as a debt servicer operating in 20 European countries. The commentary discusses how the company is reckoning with its own debt through a prepacked Chapter 11 reorganization plan and how this might affect our credit ratings involving Intrum, Intrum Italy, or its subsidiaries.

Key Highlights:
-- Intrum announced the intention to begin a solicitation process with its creditors for a prepackaged Chapter 11 reorganisation plan under the United States Bankruptcy Code in the Southern District of Texas.
-- The Chapter 11 filing resulted from the high inflation that negatively affected the services industry and reduced access to capital markets owing to a decreased appetite from investors.
-- We will continue to monitor any development on the Intrum situation and assess any potential consequences on the performance of the transactions we rate where Intrum, Intrum Italy, or any other of its subsidiaries is involved.

According to Lorenzo Simonte, Assistant Vice President, European NPL & RPL Ratings, "We are of the view that the special servicer replacement events should not be deemed as having occurred since the legal documents of the transactions we rate where Intrum Italy is involved should apply only at subsidiary level, i.e., Intrum Italy should be admitted to an insolvency proceeding rather than its parent company. Therefore, for now, we envisage no credit negative impact on our rated transactions where Intrum Italy acts as a special servicer."