Scope Ratings incorporates the assumption of a HUF 40bn outstanding bond volume into its base case but believes that the announcement by Cordia International Zrt. to increase the volume of its outstanding 2030 senior unsecured bond does not constitute a material deviation from Scope’s base case. The updated bond volume represents no material change to the current rating case as it does not impact the issuer’s business risk profile and causes only negligible changes to the metrics used to determine the financial risk profile.

The company’s intended uses of the bond proceeds are also unchanged. These includes financing of investments into real estate development and investment projects and developments, acquisitions (lands, portfolios of lands, business shares and immaterial goods etc.) working capital and potentially refinancing of outstanding loans financing the above purposes including senior loans, shareholder loans etc.

Scope-adjusted EBITDA interest coverage is now expected at 2.3x for 2020, 2.1x for 2021 and 2.5x for 2022 (before: 2.3x, 2.2x and 2.6x for the years 2020, 2021 and 2022). The ratio of Scope-adjusted-debt to EBITDA is still expected to range between 9x and 12x until 2022, in line with the existing rating case of a BB/Stable issuer rating. Please see updated rating report for details.

The rating case (BB) for senior unsecured debt also remains intact, with the increased issuance volume resulting in only a slight negative deviation (about 5%) in the expected recovery rate in a hypothetical default scenario.

This monitoring note does not constitute a rating action.

Download the updated rating report