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

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

The Company was found in 2017 by Mr. Agostino R. Luongo, is based in UK and is active in surety and credit granting market. ZKL is regulated by the Financial Conduct Authority and has a membership in the International Chamber of Commerce in Paris, the world's largest organization in the field of international trade.
ZKL’s business is based on arranging bonds and guarantees for all types of industries, with an emphasis on tender guarantee market in construction industry. Through structured processes and meticulous Internal Audit and Underwriting procedures, ZKL maintains a complete absence of claims procedures and effectively manages risk, ensuring full compliance with the regulatory standards set by the Financial Conduct Authority (FCA). These factors have contributed to a robust level of trust in the market towards ZKL. Recently, ZKL UK has set up ZKL EU Guarantee OU in Estonia, that has obtained the authorization to operate from the Bank of Ireland. ZKL UK also acquired 100% of ZKL Invest Service S.r.l. (now Europe Underwriters S.r.l.), an Italian MGU authorized by IVASS with EU passporting rights (these refer only to the Italian company, not to the UK one). Management plans to designate ZKL Invest Ltd as the group’s holding company. The Estonian and Italian entities will operate as the group’s main operating companies. These transactions form part of ZKL management’s broader initiative to make the Group increasingly European in nature, thereby improving its visibility and market positioning in the post-Brexit environment.

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 €23.34 million as of 31 January 2026. The company reports no financial debt. The vast majority of the company’s assets (£19.09 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 January 2026, the Company generated turnover of €2.67 million (+18% YoY), confirming the positive growth trend observed in recent years. Interest income on German bonds contributed significantly, accounting for 27% of total revenues. EBITDA amounted to €1.44 million euros (+20.75% YoY), reflecting a 53.82% return on total revenues.
The FY2026 ended with a net profit of €745 thousand. The company also delivered strong performance metrics, including return on invested capital and net profit margin.

During 2024 and 2025, 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. 

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 expand steadily over the coming years, with Italy and Germany representing the largest and most dynamic markets in terms of share and growth potential. A key industry trend is the increasing collaboration between banks and surety providers, enabling enhanced risk management capabilities and creating new growth opportunities for market participants. Regulatory developments are also encouraging financial institutions to transfer a greater portion of risk to surety companies, supporting more efficient capital allocation and improved portfolio optimization. The market remains closely linked to the construction sector, which has continued to demonstrate resilient demand even throughout the pandemic period. Overall, the surety and guarantee market in Europe, and particularly in Italy, is on a strong growth trajectory and is projected to reach approximately €6.53 billion by 2031.

The ECB's March macroeconomic projections for the euro area indicate that headline inflation will rise to 2.6% in 2026, primarily due to rising energy prices linked to the war in the Middle East, before settling at 2.0% in 2027 and 2.1% in 2028. Disturbances in commodity markets are weighing on real incomes and confidence, negatively impacting consumption and investment. Specifically, annual real GDPgrowth is expected to be 0.9%, 0.3 percentage points lower than the previous projections in December, while for 2027 and 2028 it is estimated at 1.3% and 1.4%, respectively. Over the medium term, the main driver of growth will continue to be domestic demand, supported by a stable labor market, planned public spending on defense and infrastructure, and the continuation of digitalization and the AI-driven investment cycle. On the external front, structural challenges related to competitiveness will lead to a persistent loss of market share for the euro area. The current energy crisis highlights the need for an ecological transition that reduces dependence on fossil fuels. To increase competitiveness and financial integration in Europe, regulatory adoption of the digital euro will also be essential.

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 published 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 adopts the following definition of default: a company in bankruptcy, in involuntary liquidation, in controlled administration, or that is insolvent with respect to an expired financial commitment. 

The quality of the information available for evaluating the rating of the analyzed company has been 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 is not a buyer of ancillary services 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 ongoing monitoring until withdrawal.

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

Responsible for Rating Approval - Giada D'Avenia, Rating Process Manager
giada.davenia@modefinance.com