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 completed the monitoring review for Wingholding Zrt (B+/Stable) on 27 April 2021. This monitoring note does not constitute a rating action nor does it indicate 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 Ratings GmbH (Scope) sees the issuer’s business and financial risk in line with its current base case assumptions, after the successful closing of large land acquisitions and the sale of subsidiary NEO Properties in 2020. Despite the challenges of the Covid-19 pandemic, Scope expects the issuer’s 2020 financials to be commensurate with its current credit metric assumptions prior to the upcoming release of the audited 2020 annual report. The rating is still supported by Wingholding’s strong market position in the Hungarian real estate market as well as robust revenue diversification from commercial real estate holdings and the sale of its own developments, in particular an increasing volume of residential units.

Scope-adjusted EBITDA interest coverage is expected to stay between 1.8x in 2021 and 2.3x in 2022. The ratio of Scope-adjusted-debt to EBITDA is still anticipated to range between 11x and 13x until 2022, in line with the existing rating case. Scope expects a Scope-adjusted loan/value ratio of 54%-60% for the next two business years.

The rating case for senior unsecured debt (BB-) also remains intact, with unchanged expectations regarding an above-average recovery rate in a hypothetical default scenario, leading to one notch of uplift from the issuer rating.

The methodologies applicable for the reviewed ratings and/or rating Outlook (Corporate Rating Methodology, 26 February 2020; European Real Estate Methodology, 17 January 2020) are 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 Denis Kuhn, Associate Director

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