New successful bond issue at KÉSZ Group

After issue of bonds in a value of 22 billion forints in this June, KÉSZ Holding Zrt. now issued bonds in a value of 11 billion forints. The auction on Monday was closed by oversubscription, the institutional investors purchased finally the fixed-rate 10-year term amortizing bonds with an average annual yield of 3.89 per cent. The new capital of 11 billion forints is spent by KÉSZ Group first of all to extend its construction capacity and to enhance efficiency, as well as to extend its real estate portfolio.

The second round of issue for KÉSZ Holding Zrt. was a success: the company offered bonds in a value of 10 billion forints in the framework of the Growth Bond Program of the Central Bank of Hungary. At the bond auction held on Monday investors bid for about 12.3 billion forints exceeding the offered amount, and bonds were oversubscribed in a final value of HUF 11 billion.

Institutional investors purchased 220 bonds with a nominal value of HUF 50 million each, with fixed interest, 10-year terms, with amortization from the fifth year, and a 3.89 percent average rate of return, while the coupon rate is 4.1 percent. When organizing the bond issue OTP Bank participated as an investment service provider.

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 qualification of the company and the bonds to be issued. Scope Hamburg GmbH confirmed the BB stable credit rating of KÉSZ Holding Zrt. as issuer, as published on 29 October, and extended the BB stable rating of the first-round bonds also to the second-round bonds. By this KÉSZ Group has the best company rating in the Hungarian construction industry. The credit rating company emphasized that it stated stable prospects both for KÉSZ Holding and the Bond and it notes in addition to the positive factors emphasized previously that both its sales revenue and profitability considerably improved in 2020 and this fact is supported also by the 2021 semiannual business reports. Furthermore, it evaluates positively the high proportion of the works already contracted for 2022 and 2023.

“The new resources received from the second successful issue will be spent by KÉSZ Group to extend its construction capacity and to enhance efficiency, as well as to extend its real estate portfolio” - said Tamás Vida, CEO of KÉSZ Group.
In 2020 KÉSZ Group booked a record consolidated sales revenue and it forecasts a two-digit growth for 2021 as well.