KÉSZ Group prepares to issue bonds

KÉSZ Group prepares to issue bonds

KÉSZ Group, a group of companies holding in Hungary one of the most diversified portfolio plans to issue bonds in a value of 20 billion forints. By this step the Group joins the Growth Bond Program of the Hungarian National Bank. In the course of the credit rating required for issue of bonds both KÉSZ Group as a company and its bonds received BB qualification, by which it has the best company rating in the construction industry. The new capital of 20 billion forints will be spent on new investment projects and capacity extension, actively contributing to restarting the economy declining due to the pandemic.

Bond issue of KÉSZ Group has got to the finish line. KÉSZ Group, one of Hungary's largest construction companies plans to issue 10-year term bonds in a value of 20 billion forints in the framework of the Growth Bond Program of the Central Bank of Hungary.

In the course of the Growth Bond Program (GBP) launched in 2019, the Central Bank of Hungary will purchase good, minimum B+ rated bonds issued by non-financial companies in a frame amount of 1,550 billion forints. The central bank's objective is to ensure that the domestic companies rely not only on bank loans but also on other forms of funding to an appropriate extent.

The transaction required repeated credit rating of the company and the bonds to be issued and KÉSZ Group received its result in these days. Euler Hermes Rating GmbH (called Scope Hamburg GmbH after the change of ownership) ranked both KÉSZ Holding Zrt. as a company and its bonds in category BB. By this KÉSZ Group has the best company rating in the construction industry. The independent credit and risk rating agency highlighted as positive its strong financial background, massive capital structure and that the Group has stable market and financial prospects.

"The new capital received from bond issue will be spent to extend capacity and to enhance efficiency in relation to the company's principal business activity, to widen and modernize its activity portfolio, which has been diversified even so far, and on digitalization and technological development" - said Tamás Vida, CEO of KÉSZ Group.

He added that by these projects KÉSZ Group may largely contribute to restarting the economy after the pandemic. According to the latest KSH data, construction industry might be one of the success sectors of restarting. This January the volume of new contracts concluded for construction of "other structures" including also infrastructure projects increased considerably, by 327 per cent on an annual basis, that envisages commencement of considerable construction works. The end-January volume of contracts of construction enterprises exceeded the reference figure by more than 11 per cent.

KÉSZ Group's consolidated sales revenue of 2020 is expected to exceed 125 billion forints that means a nearly 30 per cent growth even in the year of the crisis caused by the world epidemic compared to the consolidated sales revenue of 2019.