Qivalio: First European integrated rating agency

Strong commercial development driven by the market and the regulatory environment

In March 2017, Spread Research, a French credit rating agency registered with ESMA, and EthiFinance, a sustainability rating agency behind Gaïa Rating, came together to create the first integrated European financial and sustainability agency. This innovative and ambitious project received in the summer of 2017 the financial support of institutional investors (AG2R La Mondiale, Apicil, BpiFrance, Eiffel Investment Group, Groupama Rhône-Alpes Auvergne, Klésia, Siparex and SMABTP), which became its reference shareholders. In the two years since, the group has brought together and strengthened its teams, harmonized its procedures and developed its commercial offer. Based in Paris, Lyon and London, the new agency now has 40 employees and monitors more than 1,000 European companies.

The agency recorded an increase in its 2018 turnover of 25% thanks to strong expansion of the number of companies analyzed, now spread over Northern Europe (30%), Southern Europe (30%), and France (40%). This strong development is the result of growing demand for issuers rating and subscriptions dedicated to European investors.

In a market with more and more diversified instruments, with requests for flexible and competitive financing such as NEU CP, Spread Research has delivered short-term ratings for high-profile corporates such as Bellon, Clarins, Fimalac, Sonepar and Sodexo.

Impact loans, which enhance bank credit terms based on the borrower’s ESG (environment, social and governance) performance, have taken their first steps. In July 2018, EthiFinance accompanied Séché Environnement and a pool of banks on the occasion of such a loan. On the municipalities’ side, EthiFinance issued a Second Opinion on a funding program for the Eure department for projects with environmental and social impacts.

In a context of sharply declining research supply at the European level, following the entry into force of the MiFID II Directive, Spread Research strengthened its position as the leading provider of independent credit research on nearly 200 companies aimed at European investors. In 2018, the major professional media frequently quoted Spread Research among the best global credit research providers. At the same time, EthiFinance rose to 4th place in the SME category in the Extel ranking out of a total of 17 sustainability agencies.

The agency anticipates continued strong growth for its services in 2019 with increased demand for the recently released combined analysis. The market is now convinced of the need for ESG criteria in credit analysis and loan conditions granted by banks. This situation is reinforced, at the European level, by the projects of the European Commission and, in France, by the energy transition and the PACTE laws, which together position the European continent as a forerunner in this area.

Reaffirmed ambitions, strengthened capital, and new identity

On the strength of these good performances, the agency decided to accelerate its development in Europe by strengthening its talent pool and investing in new technology. The group has received full support from its key shareholders, now joined by Aviva. A capital increase of € 3 million, which has just been completed, will soon be complemented by a second transaction with new institutional shareholders.

Phalla Gervais, CFO and Deputy CEO of Aviva France, said: « Integrating ESG factors is core to our investment strategy. Our support for the development of Spread Research aims to promote the integration of ESG criteria in financing tools for corporates in Europe. »

To accompany the transformation and international development of the group, its leaders have decided to choose a new name: Qivalio. This umbrella brand will cover the group’s four activities covering financial analysis (Spread Research and Spread Ratings) and sustainability analysis (EthiFinance and Gaia Ratings). It reflects the vision, values and expertise of the group at the international level.

Julien Rérolle, Chief Executive Officer of Spread Research, said: "Our dynamic development and the response of the market and regulators confirm the validity of our strategic choices and our unique positioning in Europe. In particular, I would like to warmly congratulate all the teams for their commitment and the work accomplished in this period of strong growth."

Emmanuel de La Ville, Chief Executive Officer of EthiFinance, said: "The development of commercial synergies and the level of innovation above our expectations are the result of the joint work of our teams and I would like to thank them. We will continue to invest in services, systems and methods to better serve our clients with whom we develop long-term partnerships."

Sylvain de Forges, Chairman of the Supervisory Board of Qivalio, said: "In the current volatile European context, we have the opportunity to actively participate in the structuring of a renewed European capital market and to strength the tools that will accelerate sustainable financing and the development of its very large pool of companies and entrepreneurs."