The latest information on the rating, including rating reports and related methodologies, is available on this LINK.

Rating action

Scope Ratings GmbH (Scope) has today assigned a BB rating to the senior unsecured HUF 5.0bn bond (ISIN: HU0000360193) to be issued by Envien Magyaroraszág Kft on the 14th May 2021. The bond is guaranteed by Envien International, the holding company of Envien Group, and issued under the MNB Bond Funding for Growth Scheme.

Rating rationale

Envien Magyarország plans to issue a HUF 5bn (approx. EUR 14m) bond under the MNB Bond Funding for Growth Scheme. The bond’s tenor is 10 years with 10% of its face value subject to amortisation in 2026, 10% in 2027, 10% in 2028, 10% in 2029, 10% in 2030 and the remaining 50% in 2031. The coupon will be fixed and payable on an annual basis. Funds from the bond will be used for capex, working capital, general corporate purposes and to increase liquidity buffers.

The guarantee from Envien International is unconditional and irrevocable, totalling HUF 6.1bn for the full value of the bond, plus a contingency buffer to cover all costs to Envien Magyarország. The security is unconditional and unsubordinated, ranking as senior unsecured debt for Envien International. Envien Magyarország’s income will serve to fully cover the payment obligations generated by the issuance, with finance coverage from existing assets, as well as after-tax profits and profit reserves. The only trigger for the guarantee is the non-performance of Envien Magyarország.

In Scope’s view, the final terms and conditions do not deviate materially from the indicative terms and conditions on which the preliminary P(BB) rating was based on. Envien Magyarország’s issuer rating of BB/Stable is unaffected.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for these Credit Ratings and/or rating Outlook (Corporate Rating Methodology, 26 February 2020; Rating Methodology: Chemical Corporates, 23 April 2021) are available on https://www.scoperatings.com/#!methodology/list.
Scope Ratings GmbH and Scope Ratings UK Limited apply the same methodologies/models and key rating assumptions for their credit rating services, while Scope Hamburg GmbH’s methodologies/models and key rating assumptions are different from those of Scope Ratings GmbH and Scope Ratings UK Limited.*
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in ‘Rating Definitions – Credit Ratings, Ancillary and Other Services’, published on https://www.scoperatings.com/#!governance-and-policies/rating-scale. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://www.scoperatings.com/#governance-and-policies/regulatory-ESMA. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/#governance-and-policies/rating-scale. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://www.scoperatings.com/#!methodology/list.
* This paragraph, which concerns the different methodologies applied by Scope Ratings GmbH/Scope Ratings UK Limited and Scope Hamburg GmbH, was added after the initial publication on 6 May 2021.

Solicitation, key sources and quality of information
The Credit Rating was not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With Rated Entity or Related Third Party Participation YES
With Access to Internal Documents                              YES
With Access to Management                                         YES
The following substantially material sources of information were used to prepare the Credit Rating: the Rated Entity, public domain and Scope Ratings’ internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting the Credit Rating originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Rating and the principal grounds on which the Credit Rating are based. Following that review, the Credit Rating was not amended before being issued.

Regulatory disclosures
This Credit Rating is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Rating is UK endorsed.
Lead analyst: Eugenio Piliego, Director
Person responsible for approval of the Credit Rating: Henrik Blymke, Managing Director
The issuer Credit Rating/Outlook and the preliminary Credit Rating for the bond were first released by Scope Ratings on 24 March 2021.

Potential conflicts
See www.scoperatings.com under Governance & Policies/EU Regulation/Disclosures for a list of potential conflicts of interest related to the issuance of Credit Ratings.

Conditions of use / exclusion of liability
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