Euler Hermes Rating has assigned a BB+ first-time issuer rating to Hungarian gas distributor TIGÁZ Földgázelosztó Zrt / The proposed 2019/2029 bond issuance was rated BB+ based on preliminary terms

Hamburg (ots) - The BB+ first-time issuer rating is mainly driven
by low to moderate business risks due to an established market
regulation, a territory-based gas distribution licence, predictable
distribution volumes/tariffs and largely efficient operations leading
to robust sector benchmark scores. Consistently high financial debt
levels (also including a notable proportion of shareholder funding)
and a currently limited financial flexibility slightly weight on the
issuer rating of TIGÁZ. The rating is expected to remain stable over
the next twelve months.

The preliminary BB+ issuance rating was assigned to the proposed
2019/29 bond issue maturing in 2029 with a total expected issuance
volume of between HUF 34bn and 50bn. The rating was derived from
TIGÁZ' current issuer credit rating (BB+), the bond's proposed senior
ranking, assumed reasonable creditor protections based on preliminary
bond terms and adequate recovery expectations in a hypothetical bond
default scenario.

TIGÁZ is the largest natural gas distribution system operator
(DSO) in Hungary and distributes over 2 billion cubic metres of
natural gas annually (c. 32% of total domestic consumption) to 1.2
million customers (c. 36% of all connected households in Hungary) via
a 33,800 km long pipeline network (c. 42% of the national grid).
TIGÁZ operations are concentrated in the North-Eastern regions of
Hungary serving customers in 1,092 municipalities. At the end of
2018, TIGÁZ employed a workforce of 1,174 and had generated revenues
totalling HUF 31,223 million based on regulated gas distribution
tariffs.

Euler Hermes Rating GmbH (Euler Hermes Rating) was founded in 2001
as an independent European rating agency of the Euler Hermes and
Allianz Group focusing on issuer and issuance ratings. Euler Hermes
Rating is registered as a credit rating agency (CRA) in accordance
with Regulation (EC) No 1060/2009 of the European Parliament and
Council (as amended) and is considered as an external credit
assessment institution (ECAI) by the European Banking Authority
(EBA). Euler Hermes Rating is a subsidiary of Euler Hermes (ELE:PA),
the world leader in trade credit insurance. The Moody's group owns a
minority stake in Euler Hermes Rating.

Further information on this rating, the corresponding reports and
applied methodologies can be found at www.eulerhermes-rating.com.

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