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Rating action

Scope Ratings GmbH (Scope) has today downgraded the issuer rating of Globe Trade Centre S.A. (GTC) and its subsidiary GTC Real Estate Development Hungary Zrt. to B- from B+. The senior unsecured debt rating of both issuers has been downgraded to B from BB-. Concurrently, Scope has downgraded the rating of the green notes (XS2356039268) issued by GTC Aurora Luxembourg S.A., which GTC unconditionally and irrevocably guarantees, to B from BB-. All ratings are kept under review for a developing outcome.

The downgrade is driven by elevated refinancing risk related to GTC’s FY 2026 maturities, in particular the EUR 500m senior unsecured bond due in June 2026. Progress in securing refinancing has been slower than anticipated, leaving execution risk high despite the company’s active engagement with stakeholders and financing partners. GTC is pursuing discussions with bondholders, supported by its mandated advisor JP Morgan, while also negotiating extensions of secured bank facilities and considering selective disposals. These initiatives, however, remain time-consuming and subject to execution risk.

The under review status reflects potential stabilisation if tangible refinancing progress emerges, but also the risk of further rating pressure if liquidity deteriorates.

The full list of rating actions and rated entities is at the end of this rating action release.

Key rating drivers

Business risk profile: BBB- (unchanged). Scope notes that there are no significant changes in GTC’s business risk profile, which remains supported by its position as one of the leading commercial real estate companies in the Central and Eastern Europe and its geographically diversified asset base across seven countries.

The company remains medium-sized in a European context, with Scope-adjusted total assets* of EUR 3.0bn as of end-March 2025 (up 18% YoY), primarily driven by the acquisition of the German residential portfolio. Poland, Hungary and Germany account for the largest markets.

The occupancy of the commercial real estate portfolio was stable at 86% as of March 2025, with a weighted average unexpired lease term of 3.7 years (Q1 2024: 3.4 years). GTC maintained solid profitability in 2024, with EBITDA margin of 76% (down 2.4pp YoY).

Financial risk profile: B- (revised from B+). The revision of the financial risk profile reflects elevated refinancing risk from approaching maturities, as reflected by inadequate liquidity.

EBITDA interest cover is expected to decline from 3.3x in 2024 to below 1.7x in 2026, driven by higher funding costs and the debt-funded acquisition of the German residential portfolio. GTC’s average cost of debt stood at 3.63% as of end-March 2025 and is expected to increase further with upcoming refinancing, most notably of the EUR 500m bond due in June 2026.

GTC’s leverage, as measured by the loan/value ratio, stood at 52% as of end-December 2024 (up 4.5pp YoY), reflecting the debt-funded acquisition of the German residential portfolio. The company aims to deleverage through cost-efficient modernisation measures (supported by subsidised funding) and selective asset disposals (targeting approximately 40% of the portfolio over time). Execution risks on timing, volume and pricing remain material, and Scope expects only gradual improvements in leverage through 2026.

Liquidity: inadequate, -3 notches (revised from -1 notch). Scope applies a three-notch negative adjustment within the B- financial risk profile to reflect elevated refinancing risk and insufficient coverage of upcoming debt maturities, in particular the EUR 500m unsecured bond due in June 2026, for which refinancing has yet to be secured.

Scope acknowledges that GTC is actively working on refinancing options, engaging with bondholders and banks, but these initiatives remain time-consuming and subject to execution risk. Failure to address refinancing needs in a timely manner could result in a further deterioration of Scope’s liquidity assessment.

While short-term coverage of 2025 maturities appears manageable, liquidity risks intensify from 2026 onwards, when sizeable obligations fall due. In total, more than EUR 800m of debt matures by end-June 2026, including the EUR 500m senior unsecured bond in June 2026, with the remainder being secured debt. Without timely refinancing, available cash sources would fall materially short of covering these obligations.

Liquidity was bolstered in June 2025 by a new EUR 84m secured loan from J&T Banka, backed by Galeria Pólnocna (valued EUR 241m at YE 2024), with part of the proceeds used to finance the EUR 42m buyout of minorities in the German residential portfolio.

Scope highlights that the bonds issued by GTC Real Estate Development Hungary Zrt under the Hungarian National Bank’s Bond Funding for Growth Scheme have a covenant requiring the accelerated repayment of the outstanding nominal debt amount (HUF 59.4bn) if the debt rating of the bonds stays below B+ for more than two years (grace period) or drops below B- (accelerated repayment within 90 days). Such a development could adversely affect the company’s liquidity profile. Following today’s downgrade of the senior unsecured debt rating to B, GTC has entered the grace period. This means the company must ensure the debt rating returns to B+ before the grace period ends on 28 August 2027, unless the rating falls below B-. If the debt rating does not return to B+ within the grace period, the company could face severe liquidity constraints and enter a default, unless it obtains refinancing that covers the early repayment of the outstanding bond amount or it proactively obtains an investor waiver related to the repayment acceleration.

Standalone credit assessment: B- (revised from B+). Considering the challenging liquidity profile and elevated refinancing risks, the revised standalone credit assessment is capped at the level of the financial risk profile, since financial and liquidity risks will be the key determinant of the company’s credit profile in the coming months.

Supplementary rating drivers: credit-neutral (unchanged). Supplementary rating drivers have no impact on the issuer rating. Scope notes the non-distribution of dividends in 2025, which helped preserve cash amid ongoing refinancing challenges.

Under review for a developing outcome

The under review for a developing outcome reflects the elevated near-term refinancing risks, particularly regarding GTC’s EUR 500m senior unsecured bond maturing in June 2026. Scope is closely monitoring the company’s progress in addressing this refinancing need in a timely manner. The agency acknowledges GTC’s active efforts in addressing the refinancing of its EUR 500m bond.

The under review for a developing outcome reflects potential stabilisation if tangible refinancing progress emerges, but also the risk of further rating pressure if the current refinancing plan is hindered.

Failure to timely address the refinancing of the FY 2026 maturities could result in a further deterioration of the liquidity assessment. In such case, GTC would increasingly become dependent on the execution of asset disposals to generate the required capital or the extension and upscaling of secured financing, both of which are subject to execution and market risks.

The upside scenario for the ratings and Outlook is:

1. Easing liquidity concerns through the successful refinancing of 2026 maturities.

The downside scenario for the ratings and Outlook is:

1. Worsening liquidity concerns due to the lack of tangible and timely progress on refinancing upcoming 2026 maturities.

Debt ratings

GTC had EUR 650m in capital market debt outstanding as of end-June 2025. All issuances are irrevocably and unconditionally guaranteed by Globe Trade Centre S.A.

Scope’s recovery analysis suggests an ‘excellent’ recovery for senior unsecured debt in a hypothetical default scenario in 2026, based on a distressed liquidation value of EUR 1.8bn. This includes a market value decline of approximately 30% on GTC's investment properties (equivalent to a ‘B’ category stress) and a 10% deduction for liquidation costs. This distressed value is benchmarked against forecasted secured debt of EUR 1.1bn and unsecured debt of EUR 0.7bn.

Scope has downgraded the senior unsecured debt rating to B from BB-, still positioned one notch above the issuer rating. Given that the debt class rating is closely linked to the issuer rating, it remains under review for a developing outcome.

GTC’s unencumbered asset ratio stood above 110% as of end-March 2025, providing a pool of collateral to bondholders and justifying the one-notch uplift to B.

Environmental, social and governance (ESG) factors

Overall, ESG factors have no impact on this credit rating action.

All rating actions and rated entities

Globe Trade Centre S.A.

Issuer rating: B-/Under review for a developing outcome, downgrade

Senior unsecured debt rating: B/Under review for a developing outcome, downgrade

GTC Real Estate Development Hungary Zrt.

Issuer rating: B-/Under review for a developing outcome, downgrade

Senior unsecured debt rating: B/Under review for a developing outcome, downgrade

GTC Aurora Luxembourg S.A.

Senior unsecured (guaranteed) debt instrument rating (ISIN: XS2356039268): B/Under review for a developing outcome, downgrade

*All credit metrics refer to Scope-adjusted figures.

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 Outlook, (General Corporate Rating Methodology, 14 February 2025; European Real Estate Rating Methodology, 2 June 2025), are available on scoperatings.com/governance-and-policies/rating-governance/methodologies.
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 scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): registers.esma.europa.eu/cerep-publication/. A comprehensive clarification of Scope Ratings’ definitions of default and Credit Rating notations can be found at scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. 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 scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Ratings if the Credit Ratings were to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Ratings: public domain, the Rated Entity 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 these Credit Ratings 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 Ratings and/or Outlook and the principal grounds on which the Credit Ratings and/or Outlook are based. Following that review, the Credit Ratings and/or Outlook were not amended before being issued.

Regulatory disclosures
These Credit Ratings and/or Outlook are issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Ratings and/or Outlook are UK-endorsed.
Lead analyst: Fayçal Abdellouche, Senior Analyst
Person responsible for approval of the Credit Ratings: Thomas Faeh, Executive Director
The Credit Ratings/Outlook assigned to Globe Trade Centre S.A. and GTC Real Estate Development Hungary Zrt. were first released by Scope Ratings on 12 November 2020. The Credit Ratings/Outlook were last updated on 11 June 2025.
The Credit Rating assigned to the senior unsecured (guaranteed) debt instrument issued by GTC Aurora Luxembourg S.A. was first released by Scope Ratings on 24 January 2022. The Credit Rating was last updated on 11 June 2025.

Potential conflicts
See scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings, as well as a list of Ancillary Services and certain non-Credit Rating Agency services provided to Rated Entities and/or Related Third Parties.

Conditions of use/exclusion of liability
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