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Rating action

Scope Ratings GmbH (Scope) has today affirmed the BB- issuer rating of Cordia International SE (Cordia) and revised the Outlook to Stable from Negative. Scope has also affirmed the BB- senior unsecured debt rating.

The Outlook revision to Stable from Negative reflects the issuer’s ability to withstand challenging market conditions over an extended period, while maintaining credit metrics commensurate with the rating. While interest payments and the inherent earnings volatility continue to weigh on cash flow, the steady volume of contracted sales and pre-funded projects help limiting downside risks. The improved visibility on future earnings and strengthened liquidity headroom underpin the Stable Outlook.

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 continues to reflect Cordia’s established position in the residential development property market in Central Europe, supported by its sizeable and balanced project pipeline, with a potential of 10,752 units¹ as of end-June 2025. However, two factors continue to constrain Scope’s assessment, as they present a cluster risk for cash flow: the company’s relatively small scale in a European context, with Scope-adjusted total assets* of HUF 320bn (~EUR 841m) as of end-June 2025; and continued concentration in its core markets of Hungary and Poland, which account for around 92% of units under construction as of end-June 2025.

The pre-sale rates of Cordia’s completed and ongoing projects contribute significantly to mitigating development risks and provide meaningful visibility on future revenues. As of Q3 2025, pre-sales reached 95% for completed projects (up 7 pp YoY) and 46% for projects under construction².

Profitability as measured by the EBITDA margin is forecasted to remain above 15%, supported by the low cost of land for ongoing projects, supportive market sale prices and normalised development costs. The weighted average internal rate of return remains solid at approximately 22% for ongoing projects.

Financial risk profile: BB- (unchanged). The financial risk profile reflects Cordia’s moderate credit metrics, although constrained by the exposure to interest rate risk and the potential for earnings and cash flow volatility.

Debt protection as measured by the EBITDA interest cover stood at 2.4x in H1 2025 (2024: 6.3x). This remains adequate as it provides a buffer against the cash flow volatility inherent to developers. Nonetheless, floating rate debts (40% of total debt as of end-June 2025) present constraints on Cordia’s debt protection. However, Scope deems this exposure manageable due to the synchronisation of construction-loan drawdowns and the timely repayment profile along with the execution of projects. Furthermore, Scope does not expect downside pressure from floating rate debt in the short term in line with Hungary’s monetary policy easing. Scope notes that the company’s interest cover remains subject to volatility, particularly sensitive to timing mismatches between development activity and revenue recognition, an inherent feature of Cordia’s develop-to-sell model in Hungary and Poland.

Leverage, as measured by debt/EBITDA, declined to 2.6x at the end of December 2024 (end-2023: 4.4x), reflecting Cordia’s development-led profile subject to the volume of handovers and the meaningful improvement in profitability, alongside a stronger liquidity position. Scope expects gross indebtedness (HUF 157.1bn as of end-June 2025) to increase over 2025-27, in line with Cordia’s expanding pipeline and associated financing needs. Gross debt is therefore projected to climb to between HUF 210bn-250bn including lease liabilities by end-2027.

Liquidity: adequate (unchanged). Cordia’s liquidity is adequate, with cash sources (unrestricted cash and cash equivalents of HUF 62.3bn as of end-June 2025) comfortably covering short-term debt of HUF 15.6bn due in the 12 months to end-June 2026.

The company benefits from project funding, with HUF 68.4bn of unutilised construction facilities as of end-June 2025. The private placement of a EUR 150m 15-year bond in October 2025 further strengthens long-term funding and supports the pipeline build-up.

Cordia is maintaining a dedicated liquidity reserve for bond redemptions, under which a portion of cash was reallocated to longer-dated financial investments. Scope acknowledges Cordia’s long-term financial assets (HUF 61bn as of end-June 2025), and partially considers a portion as cash equivalents.

Supplementary rating drivers: credit-neutral (unchanged). Supplementary rating drivers have no impact on the issuer rating.

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectations that Cordia will successfully execute on its development pipeline while maintaining at least moderate credit metrics. The Stable Outlook also reflects the good visibility on future earnings stemming from steady volume of contracted sales, despite still challenging market conditions.

The upside scenario for the ratings and Outlook is:

1. Significant improvement in Cordia’s business risk profile, particularly with regard to reduced concentration risks (deemed to be remote at present)

The downside scenario for the ratings and Outlook is:

1. EBITDA interest cover dropping below 2x on a sustained basis

Debt rating

Scope has affirmed the BB- senior unsecured debt rating. Scope expects an ‘average’ recovery for outstanding senior unsecured debt in a hypothetical default scenario in 2027 based on the company’s liquidation value. Given an unencumbered asset ratio of above 110%, senior unsecured debt holders could also benefit from a pool of assets not pledged as collateral.

Environmental, social and governance (ESG) factors

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

All rating actions and rated entities

Cordia International SE

Issuer rating: BB-/Stable, Outlook change

Senior unsecured debt rating: BB-, affirmation

1. Excluding units under acquisition.
2. Excluding ‘Lampworks’ build-to-rent project.

*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 Credit Ratings were not requested by the Rated Entity or its Related Third Parties. The Credit Rating process was conducted:
With the 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 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: Philipp Wass, Managing Director
The Credit Ratings/Outlook were first released by Scope Ratings on 12 September 2019. The Credit Ratings/Outlook were last updated on 6 December 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.