KEY RATING DRIVERS
The EMTN unsecured notes are equalized with Jefferies' IDR, and therefore would be expected to move in parallel with any changes in Jefferies' rating. Jefferies is wholly-owned by Leucadia National Corp. (Leucadia), and given the potential for capital flows between the two entities, their ratings are equalized.
Potential positive rating drivers related to Jefferies could include continued improvement and stability in profitability, and compensation cost containment over an extended period of time. Potential positive drivers related to Leucadia could include greater clarity as to the firm's strategic objectives and eventual execution of those objectives, particularly with respect to the deployment of its excess capital. Demonstrated commitment to a conservative liquidity profile, limited investment concentrations and modest leverage at the holding company would also be considered positive drivers. The interaction between Jefferies and Leucadia will continue to play an important role in the longer-term value and risk profile of the combined franchise, in Fitch's view.
Jefferies' and Leucadia's ratings could be negatively pressured by a material increase in leverage or a less conservative liquidity and/or funding profile at either entity. Jefferies' leverage remains at historically low levels and Fitch expects that over time, if markets remain stable, it may increase modestly. Ratings would also be negatively affected if Fitch perceives the risks taken in Leucadia's investment portfolio as increasing materially from current levels. Fitch will continue to assess the ability of Jefferies' management team to run both companies effectively. Furthermore, the unanticipated departure of key executives at either Jefferies or Leucadia could also result in negative actions.
Fitch has assigned the following rating:
Additional information is available at 'www.fitchratings.com'.
--'Global Financial Institutions Rating Criteria' (
--'Securities Firms Criteria' (
Securities Firms Criteria
Global Financial Institutions Rating Criteria
Source: Fitch Ratings
Most Popular Stories
- 'Lucy's' Super Powers Tops 'Hercules' at Box Office
- The Rise and Fall of Richard Alarcon
- U.N. Renews Demand for Gaza Cease-Fire
- Nissan Profits Rise on Growth in U.S., China
- 'Sharknado' Sequel Has Bite and Lots of Laughs
- Vancrest Assisted Living Project to Add 20 Jobs
- Pending Home Sales Slipped in June
- Shania Twain's Vegas residency ending after 110 shows
- Desktop, Laptop Setups Still King
- The 2014 Fastest-Growing 100