The B+ issuer credit rating is mainly driven by Trans-Sped’s operations in the transportation and logistics sector which we assess as highly cyclical and highly competitive with low barriers to entry, low profit margins and a highly fragmented landscape. Due to the asset intense operations, Trans-Sped is subject of rather low capital returns and slightly increased net debt/EBITDA ratios. Nevertheless we value Trans-Sped’s track-record of positive, yet rather weak, earnings and the overall adequate capital structure. The rating outlook remains stable.
The B+ issuance rating for the proposed 2020/30 bond issue maturing in 2030 with a total expected issuance volume of around HUF 5bn was confirmed. The rating is derived from Trans-Sped’s current issuer credit rating (B+), the bond’s senior ranking, reasonable creditor protections included in the executed bond terms and commonly assumed recovery expectations in a hypothetical bond default scenario.
Based in Debrecen, Trans-Sped is among the top Hungarian players offering a wide range of services ranging from transportation and freight-forwarding to modern warehousing and production logistic activities with value add services like (re)packaging, storing, labelling, assembling, quality control, returned goods handling, export/import customs administration etc. The group operates c. 185.000 m² of indoor warehouse capacity with c. 200 forklift trucks and cranes, a heavy duty vehicle fleet of 480 (thereof c. 250 subcontracted) and currently 16 regional centres across Hungary. Furthermore the group engages in technical maintenance tasks, warehouse construction projects and industrial park operations at its own 28 hectare industrial park site. At the end of 2019, Trans-Sped group employed a workforce of 743 and had generated revenues totalling HUF 21,398 million.
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.
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