Fitch rates MVM bonds BBB

Fitch Ratings said it assigned MVM Zrt.'s up to HUF 60.5 billion bonds a BBB local-currency senior unsecured rating.

MVM will sell up to HUF 55 billion plus, and subject to over-allotment in the planned auction, an additional HUF 5.5 billion. The bonds will pay a fixed coupon of 3¼% per year and have a 10-year tenor with an amortizing repayment schedule. Ten per cent of the face value of the bonds will become due every year between 2028 and 2030 and the remaining 70% in 2031.

“The rating of the bonds is at the same level as MVM's long-term local-currency issuer default rating (IDR), as the bonds will constitute direct, unconditional, unsecured and unsubordinated obligations of MVM,” Fitch said in a press release.

MVM will use the proceeds to finance general corporate purposes. “However, MVM undertakes that it will not use any part of the bond proceeds to finance the operations, technological development or capacity expansion –– including the addition of any new capacities –– of MVM group's coal-fired power plants or any other coal-based facilities,” the agency said.

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