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Abroncs Kereskedőház Kft (“AKH”) has announced its plans to issue a senior unsecured bond with a volume of HUF 3.5bn. AKH intends to place the bond under the Hungarian central bank’s Bond Funding for Growth Scheme (MNB scheme). The new bond will have an anticipated fixed coupon of 2.8% per annum, a maturity of seven years with amortization and 50% repayment upon maturity. The amortization schedule is the following: 5.714% per year of the face value for the period 2021-2023, 10% for 2024, 10.714% for 2025 and 12.144% for 2026. AKH’s direct holding entity (Abroncs Hungária Kereskedőház Kft) and the following subsidiaries all act as guarantors: AKH Vagyonkezelő és Ingatlanhasznosító Korlátolt Felelősségű Társaság, AKH Pnevmatike Trgovina d.o.o, AKH Pneu CZ s.r.o, AKH Slovakia s.r.o, SC Anvelonet s.r.l. and AKH Gume d.o.o.

The new bond is earmarked solely for the refinancing of all of AKH’s debt, with the exception of the overdraft facility, for a total amount of HUF 3.3bn. The planned MNB bond represents an element of the external funding which Scope incorporated in its initial rating case published on 20th November 2020. Scope anticipates that the leverage will remain below 3.0x in addition to the assumption that no dividend payment will be made in the coming years.

Overall, the rating case for AKH’s BB/Stable issuer rating remains unchanged. Moreover, the placement of this senior unsecured debt position does not alter Scope’s view on average recovery expectations for senior unsecured debt in a hypothetical default scenario. This is reflected in the BB rating for AKH’s senior unsecured debt.

This publication does not constitute a credit rating action. Scope recently released its initial public rating on Abroncs Kereskedőház Kft on 20th November 2020. For the official credit rating action release click here.