The rating action reflects the risk that credit metrics could deteriorate amid weak market fundamentals for newly built apartments. This risk has led to a weaker assessment of the financial risk profile.

Following the recent affirmation of the BB/Negative issuer rating, Scope has updated its analytical report on Cordia International Zrt.

The affirmation reflects credit metrics that have remained well within Scope’s rating guidance, thanks largely to strong profitability that has allowed the company to withstand the weak market fundamentals on newly built apartments.

The ratings are primarily driven by the company's well diversified project pipeline and currently moderate leverage but constrained by a lack of recurring revenues and negative free operating cash flows due to forecasted expansion plans.

Scope has conducted a monitoring review of Cordia International Zrt. after the release of the audited 2020 annual report and sees no impact on the BB/Stable issuer rating or the BB instrument rating on all senior unsecured debt.

Cordia has announced plans to tap the its 2030 senior unsecured bond by an additional HUF 4bn placement to a new total volume of HUF 40bn

Cordia has announced plans to increase the total maximum issue volume of the contemplated senior unsecured bond to HUF 36bn from HUF 33bn.

The ratings are primarily driven by the company's well diversified project pipeline and moderate leverage but constrained by a lack of recurring revenues and negative free operating cash flows.

The issuer rating is driven by the company’s well-diversified project pipeline and strong debt protection, but held back by its status as a pure-play developer and significantly negative free operating cash flows.