Category: Credit Rating Agency

ETC INVEST SPA Corporate Credit Rating (Affirm)

Corporate Credit Rating (Solicited) for ETC INVEST SPA: B1+ (Affirm)

modefinance published the Solicited Corporate Credit Rating of ETC INVEST SPA on its CRA website, and the rating assigned to the entity is B1+ (Affirm). The analysis revealed that the Company has average capability of repaying financial obligations, and is little affected by adverse economic scenarios.

ETC Invest S.p.A. is an Italian company that provides consulting services in project and trade finance, with an exclusive operational focus on the African markets, directly and through the Group's subsidiaries. ETC Invest S.p.A. operates as confirming house, i.e. a specialized entity that purchase goods and services, favors their export by managing the specific contractual, logistical and financial aspects of the foreign country, and ensures the credit risk by guaranteeing the supplier spot payment and by granting the external customer the necessary financing.
The Company was established in 2016 but can be dated back to 2012, with the establishment of ETC S.r.l. Afterward, the Company has pursued an internationalization process, with the establishment between 2015 and 2017 of 2 companies based respectively in Benin and Malta and of an agency in Cameroon. Thanks to the direct and indirect presence in Africa and to the integrated expertise of finance and supply chain management, the ETC Group has become the leader and main reference of banks and industrial/commercial groups in the management of supply and investment projects in Africa, in sectors that range from agribusiness to industrial, but also transport and green energy.

Key Rating Assumption

The company was established in 2016, but its operational activity began in 2012. From then on, the Company undertook a process of internationalization and Group reorganization, changing its legal form into a joint stock company and improving its structure and transparency. The partners and directors of the Company have previous experiences in the field of major international trade and can rely on a precious network of experts, collaborators, and professionals in the countries where it operates. ETC Invest S.p.A. is directly controlled by two founding members, who also hold positions in the board of directors, and has a public participation too. It presents both internal and external control bodies. In 2019 the board approved the increase of the company share capital to 640 thousand euro, proposing a further increase to 15 million euro before the end of 2021 through the issue new shares to be offered as an option to its shareholders. The Group includes three foreign companies, whose economic-financial condition is sufficient.
In 2019 the Company filed its first consolidated financial statements, which show an adequate economic-financial condition. The Company presents good liquidity values and an extremely strong solvency, thanks to the consolidation of the shareholders’ funds of one of its subsidiaries, which in 2019 consistently strengthened its equity structure. The Group’s profitability indicators, also due to the impact of the higher shareholders’ funds, are quite low and they should be improved through an increase in business volumes.
Regarding the central credit register, the Company does not present any criticality and shows a good management of the risks at maturity and of the overdraft facility risks. In recent months, the self-liquidating credit lines have been fully utilized should be increased. The only overruns recorded were of negligible amount and are likely to be attributed to account errors. No black records have been found.
Despite the discrepancy between the NACE code and the actual activity carried out by the Company, the performance of both ETC Invest S.p.A. and of the peer group can be considered sufficient. The consulting industry is globally expected to decrease by 19% in 2020. The reason is mainly due to the decision of clients to delay projects, decrease their scope or cancel them because of the Covid-19 pandemic. Consultants working in the financial sector will be less impacted, since financial assistance is expected to be very much in demand to support the economy recovering. The Company operates mainly with the African countries belonging to the OHADA, and, in 2019, mostly with Cameroon and Central African Republic. Because of Covid-19 pandemic and the prevention policies adopted, the GDP growth is expected to drop down for both countries in 2020, in particular for Cameroon, whose economy is particularly dependent on investment activities. Both countries suffer from a high poverty rate and Central African Republic remains in a fragile situation, with an unstable security environment and poor governance. An increase in political risk on the Company was noted. Decisions taken by governments to prevent and contain the spread of Covid-19 have a negative effect on demand, labor market, banking and financial system. Governments have implemented several policies and measures to contain the impact of the Covid-19 emergency, yet the health emergency prevention policies can affect businesses in the short term.

Sensitivity Analysis

In the following table, the addressing factors, actions or events that could lead to an upgrade or a downgrade are summarized: 



The present Corporate Credit rating is issued by modefinance under EU Regulation N. 1060/2009 and following amendments.
The present rating is solicited, and based on both private and public information. The rated entity and/or related third parties have provided all private information used. modefinance had access to some accounts and other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available here.
The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available here. For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.
modefinance refers to default as a company under bankruptcy, or under liquidation status, or under administration or for which missed payments on a financial obligation are officially recorded.
The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance does not perform any audit activity and is not in a position to guarantee the accuracy of any information used and/or reported in the present document. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.
The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation. No amendments were applied after the notification process.
The rated entity is not a buyer of ancillary services provided by modefinance (credit risk software). The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.
The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.


Head Analyst – Andrea Marion
+39 0403756740

Assistant Analyst – Giulia Valentina Facchini
+39 0403756740

Responsible for Rating Approval – Pinar Dilek
+39 0403756740  

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