Scope Ratings incorporates the assumption of a HUF 6.6bn placement volume into its base case but believes that the announcement by Duna House Holding Nyrt. to increase the placement volume of its planned senior unsecured bond does not trigger a rating action. The updated bond volume represents no material change to the current rating case, no impact on the issuer’s business risk profile, and only negligible changes to the metrics used to determine the financial risk profile.

The company’s intended uses of the bond proceeds are also unchanged. These include the acquisition of companies in a volume of around HUF 3bn in its core segment in the CEE region as well as for the repayment of existing financial debt.

The Outlook remains unchanged as well at Stable (no rating action) and incorporates our view on the stability of the issuer’s core business of real estate and loan brokerage and its ability to generate cash. Moreover, the Stable Outlook reflects our expectation that the issuer will be able to return its financial leverage to below 2.0x after the anticipated temporary spike in 2019 and 2020 caused by the Forest Hill development.

The rating case (BB-) for senior unsecured debt also remains intact, with the increased issuance volume resulting in a slight deviation (about one percentage-point) in the expected superior recovery rate (70%-90%) in a hypothetical default scenario. Hence, a rating action on the instrument is likewise not warranted.

Download the updated rating report