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Scope has updated its rating case and financial forecasts for Marso Kft. The update supports the retailer's BB-/Stable rating as well as the BB long-term rating for senior unsecured debt.

To see the updated issuer report please click here.

Scope deems Marso’s credit profile to be broadly unchanged and therefore refrains from any rating action at this point. The company has been effective at weathering the effects of the depressed environment for automotive-related industries, thanks to its dominance of relevant markets in the niche sector of wholesale tyres. With operating performance in 2020 fully in line with the rating case and expected to remain so over the next few years, credit metrics are expected to remain commensurate with the current BB-/Stable issuer rating. Scope expects Scope-adjusted leverage within the 3-4x range, funds from operations/Scope-adjusted debt of above 20%, and EBITDA interest cover to remain well above 5x. Scope regards liquidity to be comfortable, with no major refinancing needs over the next two years. The temporary burden on the free operating cash flow/SaD ratio due to negative free operating cash flow during the current investment period is not a major credit-negative.

The ‘above average’ recovery for senior unsecured debt is still expected, continuing to support the BB rating for the debt category.

This publication does not constitute a credit rating action. Scope published its initial public rating on Marso Kft on 7 October 2019. For the official credit rating action release click here.