S&P views Georgia Capital negatively

S&P said it revised Georgia Capital JSC’s outlook to negative from stable and affirmed its B+ ratings.

“Georgia-based investment holding company Georgia Capital JSC (GC) is likely facing more challenging economic conditions, which could negatively affect its access international capital markets. Although the company enjoys a good liquidity buffer, with cash reaching Georgian lari (GEL) 719 million (about $232 million) at March 31, 2022, we believe our liquidity assessment could come under pressure absent a proactive refinancing of its $365 million due in March 2024,” the agency said.

On the plus side, S&P noted the group's leverage remains moderate, with an S&P Global Ratings-adjusted loan-to-value (LTV) ratio of about 26% (excluding $90 million-$95 million of cash to be offered as a shareholder loan to its renewable energy business) at March 31. Though at Dec. 31, the LTV ratio was about 20%.

The negative outlook reflects a potential downgrade over the next six-to-nine months if economic and financing conditions for the Georgian economy continue weakening, which could increase the refinancing risk on its 2024 notes.

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