Corporate Credit Rating 2025 for ZKL INVEST LTD: A3- (Affirm)

modefinance published the Solicited Corporate Credit Rating of ZKL INVEST LTD on their website and the rating assigned to the entity is A3- (Affirm). The analysis revealed that the company's capacity to meet its commitment on financial obligations is strong.

The Company ZKL INVEST LTD was founded in 2017 by Mr. Agostino R. Luongo. It is based in the UK and operates in the surety and credit granting market. ZKL’s business involves arranging bonds and guarantees for companies across various industries, with a particular focus on the tender guarantee market in the construction sector.

The Company – regulated by the Financial Conduct Authority - has built strong relationships with its clients, allowing it to offer effective risk management solutions. Through collaboration with a select group of companies in the construction industry, the Company has developed an in-depth understanding of their business models, thereby reducing credit risk. Since November 2022, ZKL has expanded into Romania by establishing new partnerships. Through structured processes and meticulous internal audit and underwriting procedures, ZKL has no ongoing claims manages risk effectively, ensuring full compliance with the regulatory standards set by the Financial Conduct Authority (FCA). These factors have contributed to a strong level of market trust in ZKL. Recently, ZKL UK established ZKL EU Guarantee OU in Estonia and has applied for authorization to operate as a European Financial Company. ZKL UK will acquire 100% of ZKL Invest Service S.r.l., an Italian MGU authorized by IVASS with EU passporting rights. Management plans to designate ZKL Invest Ltd as the group’s holding company, while the Estonian and Italian entities will serve as the group’s main operating companies.

ZKL INVEST LTD confirms an overall sound financial and operational standing. The company’s capital and financial structure is conservative and robust, with nearly all assets financed through equity, which amounted to €21.77 million as of 31 July 2025. The company reports no financial debt.

The vast majority of the company’s assets (£17.60 million) consist of investments in German government bonds, which ensure a steady inflow of funds and may, if necessary, be used to cover potential liabilities arising from guarantees issued to client companies.

The revenue structure is primarily composed of fees related to guarantee services and financial income from fixed-income securities. From 31 January 2025 to 31 July 2025, the Company generated revenues of €1.27 million, confirming the positive growth trend observed in recent years. Interest income on German bonds contributed significantly, accounting for 40% of total revenues. EBITDA amounted to €494 euros, reflecting a 39% return on total revenues. The first semester ended with a net profit of €517 thousand. The company also delivered strong performance metrics, including return on invested capital and net profit margin.

Last year, the Company strengthened its governance and internal control framework. It is currently managed by a Board of Directors consisting of three members, chaired by Mr. Agostino Raffaele Luongo, who also serves as Chief Executive Officer. Mr. Luongo is the sole shareholder of FPYIC GROUP CORP, which in turn is the sole shareholder of ZKL. The Company’s legal and IT departments are supervised by qualified professionals. Furthermore, an Internal Audit Officer was appointed in January 2025. ZKL’s financial statements are audited by a certified professional audit firm.

The Company ranks well in terms of size and solvency. However, its profitability is below the average of the peer group. The peer group appears adequately capitalized in relation to total outstanding debt, while the financial leverage ratio is somewhat insufficient. Management of current assets and liabilities shows no critical issues. In terms of profitability, the peer group exhibits solid ratios.

The European surety market is expected to grow in the coming years, with Italy and Germany holding the largest shares. Collaboration between banks and surety companies is a key trend, enabling better risk management and creating new development opportunities. Regulatory changes are encouraging banks to share risks with surety providers to optimize portfolio management. The market is closely linked to the construction sector, which has maintained strong demand even during the pandemic. By 202, supported by economic recovery and stable interest rates, the market value returned to pre-pandemic levels.

In 2024, the EU economy grew modestly by 1%, supported by strong labor markets and improved monetary conditions. In 2025, trade uncertainty from U.S. protectionist policies caused market volatility and lowered growth forecasts. Exports remain weak, but private consumption is supported by rising wages and falling inflation, expected to reach the ECB’s 2% target. Key risks include trade tensions, geopolitical instability, and climate shocks, while potential upsides arise from improved U.S.-China relations and EU trade initiatives.

The present Corporate Credit rating is issued by modefinance under EU Regulation 1060/2009 and following amendments.

The present rating is solicited and is 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 at http://cra.modefinance.com/en

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 at http://cra.modefinance.com/en/methodologies.

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.

Deadline for the appeal process expired without the notification of factual errors by the Rated Entity.

The rated entity did not buy any ancillary service provided by modefinance.

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 people 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 - Elisa Graffi, Rating Analyst
elisa.graffi@modefinance.com

Responsible for Rating Approval - Pinar Dilek, Rating Process Manager
pinar.dilek@modefinance.com