Scope Hamburg affirms BB- rating of Infogroup Holding Kft. and BB rating of the issue Infogroup 2031/A. The outlook is stable.
The business risk of Infogroup Holding Kft. is slightly increased. The decisive factor for Scope Hamburg’s assessment is the in our view slightly increased strategic risk, which arises particularly from the focus on project development activities. Scope Hamburg takes a positive view of the planned further development of the company’s own property portfolio, which Scope Hamburg believes will improve the diversification profile in terms of regionality and tenant structure in the medium term.
The financial risk of Infogroup Holding Kft. is slightly increased. Scope Hamburg takes a positive view of the comfortable liquidity position and the financial reserves in the form of numerous reserve plots, which could be divested if required. Rental income is highly stable thanks to long-term leases in conjunction with a vacancy rate that has been very low for several years, and nearly no rent losses. Profitability stands at a satisfactory level in Scope Hamburg’s view with EBITDA margins of > 52 %. Leverage ratios are expected to remain on an increased level (net debt/EBITDA of around 7.4) in the next years due to ongoing investments in new warehouse development projects. In Scope Hamburg’s view, risks to profitability exist from longer and higher vacancy rates and an appreciation of the Hungarian Forint against the Euro as most of the rental income is denominated in Euro. In addition, opportunistic new development projects/acquisitions may weaken the financial ratios.
Scope Hamburg asses the issuance Infogroup 2031/A one notch higher than the issuer rating due to appropriate creditor protection and a satisfactory expected recovery rate for the bond holders.
Infogroup Holding Kft. was founded in 1990 as a family office, and originally focused on development projects for residential construction. The group has focused on the development of commercial real estate since 2000. The company ranks today as one of the larger national real estate developers in Hungary, having built more than 100,000 m² of industrial and logistics real estate as well as more than 33,000 m² of office space. Infogroup develops real estate mainly for its own portfolio, although it also provides project development as well as asset and facility management services for third parties.
Further information on this rating, corresponding reports and applied methodologies can be found at scopehamburg.com
INFOGROUP HOLDING KFT. (ISSUER)
INFOGROUP HOLDING KFT. (BOND 2021/2031)
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