Listed IT company 4iG has been assigned an issuer rating as a prerequisite for participation in the Bond Funding for Growth Scheme (BGS) of the National Bank of Hungary (MNB). The firm was assigned a "BB-" issuer rating by Scope Ratings, one notch over the "B+" threshold for participation in the BGS.
Scope said its rating case assumes that 4iG will finalize the acquisition of T-Systems Hungary, a much bigger peer it agreed to buy for an undisclosed price in July, by the end of 2019.
"The issuer rating mainly reflects the combined entitiesʼ leading position in key segments of the Hungarian IT market. Scope expects this market to grow at low single-digit percentage points per year in the medium term, providing sufficient opportunities for the companies in the industry," said Scope.
The agency added that 4iGʼs business risk profile further benefits from T-Systemsʼ fully integrated business model, broad product portfolio and sector expertise.
For its part, 4iG noted that its shareholders earlier mandated the board to issue up to HUF 30 billion of corporate bonds.
The MNB launched the HUF 300 bln BGS on July 1, 2019, with the aim of beefing up Hungaryʼs relatively small corporate bond market. The program limits the central bankʼs purchases to 70% of a series and caps its exposure to any corporate group at HUF 20 bln.
More than 145 companies have registered for the scheme and 22 have already been assigned a credit rating, required for participation.