Page 65 - TURKRptJun20

9.2.7 ​Other sector corporate news
Fitch Ratings has downgraded Turkish household appliances maker Arcelik's Long-Term Issuer Default Rating (IDR) to BB​, two notches below investment grade, from BB+, the rating agency ​said​ on May 14. The Outlook is Stable.
The downgrade reflected a change in notching between Arcelik's IDR and the Turkish Country Ceiling and Arcelik's upcoming refinancing risk from €350mn worth of eurobonds maturing in September 2021.
The downgrade also reflected Fitch's view that Arcelik does not have the structural enhancements required for a rating two notches above Turkey's Country Ceiling of BB-, three notches below investment grade.
The Stable Outlook reflects Fitch’s expectation that Arcelik will maintain leverage metrics and profitability commensurate with the rating despite the coronavirus-related (COVID-19-related) macroeconomic stress.
Arcelik has significant loan repayments in 2020 and 2021, averaging around TRY5bn each year. Fitch is forecasting that Arcelik will be able to successfully refinance both its short-term debt and eurobond, during the respective year of repayment, albeit at higher interest rates, given the current challenging liquidity environment. Fitch added that it expected Arcelik to successfully complete refinancing before 2Q21. However, a failure to do so could put pressure on its ratings.
65​ TURKEY Country Report​ June 2020 ​ ​www.intellinews.com