News Article bond CEE financing green GTC Hungary issue
by Property Forum | Investment

A German rating agency Scope Ratings has assigned a first-time issuer rating of BBB-/Stable to Globe Trade Centre S.A. and its subsidiary GTC Real Estate Development Hungary Zrt. GTC Group also announces green bonds issuance within the framework of the Bond Funding for Growth Scheme launched by the National Bank of Hungary. The senior unsecured debt rating is BBB-. The outlook on the ratings is stable.

“The achievement of the investment-grade rating for GTC SA is a historical milestone for the company and reflects our unique position in CEE and SEE market, diversification of our high-quality portfolio in attractive locations and overall credibility,” said Yovav Carmi, President of the Management Board of GTC.  

“With an investment-grade rating, GTC Group will be provided with access to international capital markets as we will diversify bond investor base by offering green bonds under Bond Funding for Growth Scheme. This will provide us access to unique sources of long-term financing. The new funds will enable further growth of the asset portfolio. Issuance of green bonds will confirm our approach towards environmental and sustainability topics thus creating an important new benchmark,” added Ariel Ferstman, CFO and Management Board member of GTC.  

According to Scope, GTC’s risk profile benefits from the company’s market position as one of the largest publicly listed real estate companies in CEE and SEE, managing approximately 715,000 sqm office and retail space. The agency also underlines, that GTC’s portfolio predominately comprises relatively new properties (weighted economic age of under 10 years). This, combined with 340,000 sqm development pipeline, supports healthy tenant demand. It attracts international, blue-chip tenants with investment-grade credit quality, keeping occupancy rates at around 95%.

GTC’s financial risk profile outlook for GTC is Stable, reflecting the agency’s view that the company’s portfolio will continue to grow profitably, with the impact of COVID-19 on cash generation addressed by reduced capital expenditure and the suspension of dividends.

The rating has been published ahead of the Group’s contemplated green bonds issuance under the MNB Bond Funding for Growth Scheme which was implemented by the National Bank of Hungary (MNB) to increase the liquidity of the local bond market. The issuer would be GTC’s subsidiary, GTC Real Estate Development Hungary Zrt. The senior unsecured bond as well as all future debt of GTC Real Estate Development Hungary Zrt. will be irrevocably and unconditionally guaranteed by GTC SA. Proceeds of the contemplated issue are expected to be earmarked to refinance property loans and to finance redevelopment, construction and acquisition of LEED/BREEAM certified assets and will be allocated in line with the Guarantor’s Green Bond Framework. GTC is planning to close the issuance of the green bonds still this year.

Scope is a privately-held rating agency based in Berlin. It specialises in the analysis and ratings of financial institutions, corporates, structured finance, project finance and public finance. The company is registered in accordance with the EU rating regulation and operating in the European Union with ECAI status.