Scope Ratings had already incorporated the assumption of an additional HUF 1bn bond placement into the base case used for its last review of the ratings in September 2020. The increased overall bond volume – LP had issued an initial 10-year HUF 2.5bn senior unsecured bond in early 2020 – does not change the current rating case and has no impact on the issuer’s business risk or financial risk profiles.

LP Portfolio intends to place the bond under the Hungarian Central Bank’s Funding for Growth Scheme. The new bond will have a maturity of 10 years, with HUF 100m in repayments on an annual basis from 2025 until 2029, with the remainder due upon final maturity. The bond is expected to have a fixed coupon.

The company’s intended uses of the bond proceeds are also unchanged. These include the financing of investments, mainly in the real estate segment and, to a lesser degree, in the solar energy segment.

The rating case (BB-) for senior unsecured debt also remains intact as the envisaged bond was already included in Scope’s recovery calculation.

This publication does not constitute a credit rating action. Scope recently affirmed its initial public rating on LP Portfolio on 28 September 2020. For the official credit rating action release click here.