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 affirmed the BB issuer rating of Greenergy Holding Vagyonkezelő Zrt. (Greenergy) and has revised the Outlook to Negative from Stable. Scope has also affirmed the BB+ rating on senior unsecured debt.

The affirmation of the BB issuer rating reflects Scope’s unchanged view of Greenergy’s business risk profile which remains hindered by the company’s limited scale and sensitivity to market developments, while profitability and reserve capacity provision continue to provide support. At the same time, the financial risk profile broadly benefits from credit metrics that remain good and supportive of the current assessment despite some pressure. The Outlook revision captures the agency’s expectation that capex execution, combined with a normalising price environment, will require external financing, putting pressure on credit metrics and reducing loan covenant headroom. This could weigh on the financial risk profile if deleveraging does not occur as projected over 2026–2027.

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

Key rating drivers

Business risk profile: BB- (unchanged). The business risk profile remains constrained by the company’s limited scale, high dependence on external market developments and exposure to merchant risks, primarily linked to energy price volatility, with limited risk mitigation beyond its core market. At the same time, Greenergy’s ability to provide reserve (balancing) capacity from its peak-load eligible CHP (combined heat and power) assets and storage facilities to the national transmission system operator via its virtual power plant approach strengthens its market position, diversifies cash flows and supports profitability (ESG factor: credit-positive). Profitability, in turn, continues to underpin the business risk profile despite being under some pressure in recent years.

In 2024, Greenergy reported Scope-adjusted EBITDA* of around HUF 4.4bn, down from HUF 5.5bn in 2023. The EBITDA margin fell 3pp YoY to 19.1%. Nevertheless, this exceeded Scope’s expectations. The decline was mainly driven by lower power prices and the Gas Act, which increased gas procurement costs and remained in force until October 2024, affecting most of the year. For 2025–2027, Scope projects an EBITDA of HUF 5.0bn- HUF 5.1bn and improved profitability with an average EBITDA margin of around 21%, supported by the abolition of the Gas Act and the margin-enhancing contribution of newly commissioned renewable energy plants and energy storage facilities. In addition, while power prices are expected to gradually decline, they should remain above pre-energy-crisis levels.

Financial risk profile: BBB+ (unchanged). Greenergy’s financial risk profile remains supportive of the issuer ratings. However, period Scope projects weaker credit metrics over 2025-2027, particularly leverage, with pressure already visible in 2024 and a peak expected in 2025, which reduces covenant headroom. Nevertheless, Greenergy’s financial risk profile is still broadly in line with the current assessment, assuming full covenant compliance and an improvement in leverage over 2026–2027 that restores adequate covenant headroom.

In 2024, debt (including a 30% haircut on cash and cash equivalents) rose to HUF 13.1bn from HUF 9bn at YE 2023. The increase mainly reflects higher capex, partly financed with new debt, and HUF 2.3bn in bank guarantees linked to the renewal of a major client contract. As a result, debt/EBITDA increased to 2.9x (2023: 1.6x), also weighed down by lower EBITDA.

For 2025–2027, Scope projects free operating cash flow (FOCF) to remain volatile. In 2025, the agency forecasts that higher EBITDA and a normalisation of working capital will not fully offset capex of HUF 5.5bn, keeping FOCF negative before it turns positive from 2026. Scope expects Greenergy to raise debt, mainly bank loans, to fund investments, and therefore projects financial debt to peak at HUF 16.3bn in 2025, including a slight increase in bank guarantees. As a result, Scope projects leverage to rise towards 3.5x despite stronger EBITDA. In 2026–2027, Scope expects leverage to ease but remain slightly above 3.0x, supported by gradual debt reduction and resilient EBITDA sustained by new investments despite lower power prices.

Regarding debt protection, Scope expects EBITDA interest cover to slightly weaken over the projected period after two years of net cash interest received, due to an increased debt exposure and lower interest received. Nevertheless, Scope forecasts EBITDA interest cover to remain robust and comfortably above 10x, supported by overall favourable rates on newly contracted financing and recovering EBITDA.

Liquidity: adequate (unchanged). Scope views Greenergy’s liquidity profile as adequate, supported by projected liquidity ratios of above 110% in 2026–2027, despite debt maturities rising to around HUF 2bn due to the start of amortisation of MNB bond (HUF 570m year). In 2025, the ratio is expected to fall to around 100% due to negative FOCF and debt repayments of about HUF 1.4bn. However, this does not materially affect Scope’s view on liquidity, as only about 25% of the repayments fall due from September onwards, and these can be covered by HUF 2bn of cash and cash equivalents as of August 2025.

Scope highlights that Greenergy’s senior unsecured bond issued in 2021 under the Hungarian National Bank’s Bond Funding for Growth Scheme has two covenants that could adversely affect liquidity and lead to the accelerated repayment of the outstanding nominal debt amount (HUF 5.7bn). The first covenant triggers accelerated bond repayment if the debt rating of the bond stays below B+ for more than two years or drops below B- (repayment within 15 days). The second covenant requires immediate repayment is consolidated net debt/EBITDA (debt net of unrestricted cash) exceeds 4.0x for two consecutive years or in any year in 2029-2030. Based on the bond’s current rating and the agency’s forecasts regarding leverage, Scope does not see significant risk of either of these covenants being triggered.

In 2024, the issuer signed a new senior secured loan with annual financial covenants on net debt/EBITDA, leverage defined as (total fixed assets and total cash as a sum, divided by total debt) and the debt service coverage ratio. Scope forecasts full covenant compliance over 2025–2027, although headroom under the net debt/EBITDA covenant in 2025 appears reduced. Scope’s liquidity assessment assumes that Greenergy will adjust capex and dividend payments if needed to preserve covenant compliance.

Supplementary rating drivers: credit-neutral (unchanged). The rating has no adjustments related to peer group considerations, parent support, or governance and structure. However, given the continued growth in investments, Scope highlights the potential for a higher risk appetite. Nevertheless, financial policy continues to be viewed as credit neutral, supported by the company’s commitment to a 2.5x leverage target, albeit on a definition differing from Scope’s.

Despite being 51% owned by Hungarian construction company KÉSZ Holding Zrt., Greenergy remains rated on a standalone basis. Scope acknowledges that Greenergy’s BB issuer rating is higher than KÉSZ’s BB-/Negative. Nonetheless, the agency does not see an immediate impact on Greenergy’s rating. This view is based on i) the rated entity’s operational and financial independence from KÉSZ, meaning that the rated issuer’s rating is not explicitly capped by that of its ultimate parent; and ii) the high cash reserves at KÉSZ level¹, which largely mitigate the risks of an extraordinary cash outflow for Greenergy. However, Scope continues to monitor developments closely. Further credit deterioration of KÉSZ would result in pressure on Greenergy’s issuer rating.

One or more key drivers of the credit rating action are considered an ESG factor.

Outlook and rating sensitivities

The Negative Outlook reflects Scope’s expectation that a normalising price environment relative to the 2022–2023 peaks, combined with high capex and increased bank guarantees, will pressure leverage and reducing headroom under the loan covenants. The Outlook also incorporates Scope’s assumption that the credit quality of the KÉSZ group will remain broadly unchanged.

The upside scenarios for the ratings and Outlook are (collectively):

1. Sufficient headroom under loan covenants to ensure continuous compliance.
    
2. Debt/EBITDA below 3.5x on a sustained basis.

The downside scenarios for the ratings and Outlook are (individually):

1. Not enough headroom under loan covenants, increasing risk of non-compliance.
    
2. Debt/EBITDA at or above 3.5x on sustained basis.
    
3. Significant deterioration of KÉSZ’s credit rating.

Debt rating

Scope has affirmed the BB+ rating on senior unsecured debt, which relates to the HUF 5.7bn bond (ISIN HU0000360797) issued under the Hungarian National Bank’s Bond Funding for Growth Scheme.

Scope’s recovery analysis, based on an expected liquidation value in a hypothetical default scenario, indicates superior recovery prospects for senior unsecured creditors, which would support up to a two-notch uplift over the issuer rating. However, the debt rating remains non-investment grade at BB+ reflecting Scope’s cautious stance on Greenergy’s investment phase in the coming years until the agency gains greater confidence in the asset base.

Environmental, social and governance (ESG) factors

In line with the energy sector, the main ESG considerations for Greenergy relate to the environmental impact of its products and production. Scope views Greenergy’s ability to provide reserve (balancing) capacity to the national transmission service operator from its peak-load eligible generation fleet as supportive of both its market position and cash flow (ESG factor: credit-positive).

However, the company’s carbon emissions remain above the EU average. Although combined heat and power plants – the largest share of Greenergy’s generation – are classified as sustainable under the EU taxonomy, their carbon footprint remains high. Nevertheless, this should improve as Greenergy’s renewable capacity increases, with early progress already visible in 2024 (ESG: credit-neutral).

Regulatory risks are credit-neutral, as Greenergy is neither materially exposed to regulated income from renewable generation that could be affected by adverse regulation, nor to electricity supply to residential customers subject to legally capped prices.

All rating actions and rated entities

Greenergy Holding Vagyonkezelő Zrt.

Issuer rating: BB/Negative, Outlook change

Senior unsecured debt rating: BB+, affirmation

*All credit metrics refer to Scope-adjusted figures.

Rating driver references
1. Rating on KÉSZ Holding Zrt 

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 Utilities Rating Methodology, 17 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: Herta Loka, Associate Director
Person responsible for approval of the Credit Ratings: Philipp Wass, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 15 June 2021. The Credit Ratings/Outlook were last updated on 17 September 2024.

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
© 2025 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Fund Analysis GmbH, Scope Innovation Lab GmbH and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5, D-10785 Berlin. Public Ratings are generally accessible to the public. Subscription Ratings and Private Ratings are confidential and may not be shared with any unauthorised third party.