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Hell Energy gears up for HUF 67 bln BGS issue

Drinks

Hungarian soft drink maker Hell Energy on Tuesday announced plans to issue up to HUF 67 billion in bonds in the framework of the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB), according to a report by state news wire MTI.

Hell Energy earlier raised HUF 29 bln in proceeds from a 10-year BGS bond in December 2019.

In a disclosure posted on the website of the Budapest Stock Exchange after market hours, Hell Energy said Scope Ratings had downgraded its issuer rating from BB to B+, the threshold for BGS participation.

In a separate release, Scope Ratings acknowledged Hell Energy's "strong market position" in the region, "high margins" and "significant growth potential", but said the rating is "constrained by limited product diversification and increasing leverage".

Scope said Hell Energy's financial risk profile is "strongly affected" by an HUF 80 bln investment program which will be financed by the planned HUF 67 bln BGS bond issue, a state subsidy, and operating cash flow.

The 10-year BGS bond will have a corporate guarantee from Quality Pack, Hell Energy's wholly-owned canning unit.

Hell Energy Drink is the third-biggest branded energy drink globally. Hell Energy is market leader in Hungary and nine other countries, mostly in the CEE and SEE regions.

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