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Rating action

Scope Ratings GmbH (Scope) has affirmed the BB-/Stable issuer rating on 4iG Nyrt. Scope has also affirmed 4iG’s BB- senior unsecured debt rating.

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

Key rating drivers

Business risk profile: BBB- (unchanged). 4iG’s business risk profile continues to support its standalone credit assessment, underpinned by stable telecom operations and a solid market position in Hungary. Limited diversification and still-moderate margins compared to peers remain key constraints.

Scope maintains its overall view of the group’s business risk profile, as business fundamentals in the telecom segment remain broadly stable.

In 2025, 4iG continued to implement its group restructuring launched in November 2023 alongside a series of acquisitions aimed at strengthening its telecommunications and IT segments, as well as developing and expanding its space and defence activities. Regarding the latter, Scope expects an increasing EBITDA contribution from 2026 onwards, as the group maintains its strategic focus on this segment, including through acquisitions such as the arms developer Gestamen Zrt¹ in December 2025. Additionally, the acquisition of a 74.34% stake in Rába Nyrt.², completed in January 2026, and the expected completion in 2026 of the acquisition of a 75%+1 stake in N7 Defence Zrt.³ will further support the expansion of the space and defence platform.

However, the agency notes that the group’s aggregated market positioning is slightly weakened by 4iG’s modest standing in the international aerospace and defence sector. This reflects its limited scale and the early-stage nature of the consolidated businesses. Scope expects the scale of operations to increase but to remain relatively small compared with international peers. These constraints are partly offset by 4iG’s strategic partnerships, such as the strategic investment in Axiom Space Inc.⁴, cooperation with Eutelsat and the Czech defence player CSG Defence a.s., and joint ventures. These provide access to established platforms, intellectual property, and international production lines. If successfully executed, these collaborations could support i) increased manufacturing scale, ii) improved export prospects, and iii) a gradual strengthening of 4iG’s position within the regional defence and space value chain over the coming years.

For 2025, Scope projects that Scope-adjusted EBITDA* will increase to around HUF 247bn and foresees an EBITDA margin about 34% also supported by the abolition of the supplementary telecom tax, which was phased out in January 2025. In 2026, Scope forecasts that EBITDA will rise further to over HUF 260bn and exceed HUF 330bn in 2027. This is mainly due to the full-year impact of 2025 acquisitions, the execution of defence-related acquisitions in the first half of 2026, and the ramp-up of the space and defence segment, supported by a backlog of HUF 1.37bn (excluding the acquired companies). However, Scope expects the EBITDA margin to decline to 28–30% over the same period, driven by: i) the consolidation of companies with lower profitability and ii) higher operating expenditure in the space and defence segment, as the production phase typically carries lower margins. These negative effects will be partly mitigated by cost savings in the core telecom business. Similarly, Scope projects an EBITDA AL margin of around 29% in 2025, gradually declining to slightly below 25% over the following two years.

Financial risk profile: B+ (unchanged). The group’s financial risk profile remains the weakest element of its standalone credit assessment. Scope notes a deterioration in credit metrics compared with the previous base case, driven by the execution of planned transactions and higher capex, with leverage (debt/EBITDA) peaking at around 5.0x in 2026. Even so, the agency expects credit metrics to remain broadly in line with the current assessment supported by i) projected EBITDA growth, and ii) the divestment of 4iG Broadcasting Infrastructure Ltd⁵, as well as equity injection from its main shareholder totalling over HUF 170bn (both were concluded in 2025). Nonetheless, Scope highlights that failure to deleverage from 2027 as expected could have negative implications, as the group has now exhausted its headroom to a lower rating.

Scope projects negative free operating cash flow (FOCF)/debt of around –3% in 2025. This is based on FOCF coming under pressure from working-capital absorption and higher capex, before it returns to breakeven in the following two years. The agency therefore foresees average cash flow cover of -1% over the 2025-2027 period, assuming no further material increase in capex.

As a result, Scope expects debt to grow to around HUF 1.1trn in 2025, from HUF 965.6bn at YE 2024, driven by higher financial debt and a rise in other debt-like items, including bank guarantees. As a result, the agency projects that debt/EBITDA will rise to around 4.5x, with EBITDA growth only partly offsetting the increase in indebtedness. In 2026, Scope forecasts that leverage will climb further to close to 5x as debt reaches HUF 1.3trn, reflecting the execution of the announced debt-funded acquisitions and additional bank guarantees linked to the progression of the space programme. By 2027, Scope expects leverage to improve to around 4.0x, supported by a growing EBITDA contribution from the acquired entities and the ramp-up of the space and defence segment, while debt is projected in line with 2026. Please note that debt as per Scope’s calculation does not include netting of cash and cash equivalents, which the agency projects conservatively to reach over HUF 170bn by YE 2025 before gradually normalising to a range between HUF 60bn-HUF 85bn in 2026-2027 as major acquisitions and capex are executed.

Scope’s assumptions include the restructuring of the HUF 370bn NKP II bond (ISIN: HU0000361019) issued under the Hungarian Central Bank’s Bond Funding for Growth Scheme, which was finalised on 9 January 2026^6,7. Under the amended agreement, the full principal amount of the bond is due in a single instalment at maturity in 2031, while bondholders will receive a coupon increased by 75 bps.

Scope expects the significant increase in financial debt, together with the higher bond coupon, to put some pressure on EBITDA interest cover, which is projected to decline to around 3.7x in 2025–2026 before improving to above 4.0x in 2027, supported by EBITDA growth. Nevertheless, interest cover remains a supporting factor in the group’s financial risk profile.

Liquidity: adequate (unchanged). Scope views 4iG’s liquidity as adequate, supported by projected liquidity ratios above 110% in 2025 and exceeding 200% in 2026–2027. Liquidity also benefits from the shift to a bullet repayment structure for the NKP II bond, which reduces debt maturing in 2026–2027 by HUF 37bn. As a result, Scope expects scheduled debt repayments of HUF 10.1bn in 2025, HUF 14.6bn in 2026, and HUF 21.0bn in 2027 to be covered by available cash and cash equivalents of HUF 138bn as of September 2025. However, the agency notes that this structure increases cliff risk in 2031, when the full HUF 370bn NKP II bond matures. Failure to address this well in advance could put downward pressure on the group’s liquidity profile and, ultimately, its issuer and debt ratings.

Scope expects the issuer to remain in compliance with covenants over the projected period. The senior unsecured bonds issued by 4iG under the Hungarian National Bank’s Bond Funding for Growth Scheme have a covenant requiring the accelerated repayment of the outstanding nominal debt amount if the debt rating of the bond stays below B+ for more than two years (grace period) or drops to CCC (or below). The rating headroom to entering the grace period remains two notches following the affirmation of the BB- rating on the senior unsecured debt. However, Scope sees an increased risk of rating headroom erosion, given the observed decrease in recovery rates for senior unsecured bonds in a hypothetical 2027 default scenario. In addition, the bonds include a financial covenant under which exceeding a net debt/EBITDA ratio of 5.0x for three consecutive years would constitute a covenant breach and, consequently, an event of default. Based on Scope’s projections, the net debt/EBITDA ratio is expected to remain below 5.0x in 2025–2027. Therefore the rating agency considers the risk of breaching the financial covenant to be limited during this period.

Supplementary rating drivers: -1 notch (unchanged). Scope views 4iG’s financial policy as a negative rating driver, resulting in a one-notch negative adjustment to the standalone credit assessment of BB. This view is driven by the group’s ambitious, debt-funded acquisitions in recent years and the associated execution and integration risks. Scope’s maintenance of this financial policy assessment reflects the agency’s cautious stance regarding 4iG’s investment phase over the next few years. As such, the issuer rating will continue to incorporate the one-notch negative adjustment until Scope gains more confidence around its investments and growth plans in the medium term. 

Outlook and rating sensitivities

The Stable Outlook reflects Scope’s expectation that leverage (debt/EBITDA) will peak at around 5.0x in 2026 due to the execution of the envisaged transactions, before declining to more comfortable levels well below 5.0x, with EBITDA interest cover expected to stabilise in the 3.5x–4.5x range. The Outlook also captures Scope’s view that potential upside is constrained by the group’s financial policy, which has been characterised by an ambitious, debt-funded M&A strategy in recent years and is expected to continue.

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

1. Improved view on financial policy driven by stabilisation of the group's structure and business model including no material M&A activity or other discretionary spendings
    
2. Improved financial risk profile as signalled by a debt/EBITDA significantly below 4.0x on a sustained basis

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

1. Debt/EBITDA at or above 5.0x
    
2. Significantly negative cash flow cover

Debt rating

Scope has affirmed the BB- rating for senior unsecured debt which primarily relates to the two bonds issued by 4iG in March 2021 and December 2021, respectively, for HUF 15bn (ISIN:HU0000360276) and HUF 370bn (ISIN: HU0000361019) through the Hungarian Central Bank’s Bond Funding for Growth Scheme. This is based on Scope’s recovery analysis which indicates an ‘average recovery’ for senior unsecured debt, based on an expected enterprise value as a going concern in a hypothetical default scenario in 2027. However, the agency notes a lower recovery rate driven by the increase in higher ranking debt, which fully consumes the headroom to a potential downgrade of the debt rating.

Environmental, social and governance (ESG) factors

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

All rating actions and rated entities

4iG Nyrt.

Issuer rating: BB-/Stable, affirmation

Senior unsecured debt rating: BB-, affirmation

*All credit metrics refer to Scope-adjusted figures.

Rating driver references
1. 1 December 2025 4iG Nyrt announces Gestamen Zrt acquisition
2. 5 January 2026 4iG Nyrt announces completion of Rába Nyrt
3. 6 October 2025 4iG Nyrt announcement on Space and Defence acquisitions
4. 19 December 2025 4iG Nyrt on Axiom Space Inc investment
5. 9 December 2025 4iG Group announce subsidiary divestment
6. 22 December 2025 4iG Nyrt press release on bond restructuring
7. 9 January 2026 4IG Nyrt announcement on document change of 4iG NKP Bond 2031/II.Bond

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodology used for these Credit Ratings and/or Outlook, (General Corporate Rating Methodology, 14 February 2025), is 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 30 October 2019. The Credit Ratings/Outlook were last updated on 22 May 2025.

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
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