Scope Ratings reviews its ratings either yearly, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope has completed the monitoring review for Marso Kft (issuer rated BB-/Stable; senior unsecured debt rated BB) on 15th October 2020. This monitoring note does not constitute a rating action nor indicates the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Scope deems Marso’s credit profile to be broadly unchanged and therefore refrains from any rating action at this point. The company has been effective at weathering the effects of the depressed environment for automotive-related industries, thanks to its dominance of relevant markets in the niche sector of wholesale tyres. With operating performance in 2020 fully in line with the rating case and expected to remain so over the next few years, credit metrics are expected to remain commensurate with the current BB-/Stable issuer rating. Scope expects Scope-adjusted leverage within the 3-4x range, funds from operations/Scope-adjusted debt of above 20%, and EBITDA interest cover to remain well above 5x. Scope regards liquidity to be comfortable, with no major refinancing needs over the next two years. The temporary burden on the free operating cash flow/SaD ratio due to negative free operating cash flow during the current investment period is not a major credit-negative.

The ‘above average’ recovery for senior unsecured debt is still expected, continuing to support the BB rating for the debt category.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Corporate Rating Methodology, 26 February 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Adrien Guerin, Senior Analyst

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