EM CEEMEA CREDIT: Vestel Elektronik (VESTL): Fitch Downgrade to CCC
Dec-19 09:33
(VESTL: Caa1neg/NR/CCC)
- Pressure remains on Turkiye’s Vestel Elektronik, whose ratings have been downgraded by Fitch aft-mkt hours y’day.
- For context, VESTL 29s chart at 72 ⅞ cash px, down ⅝ pt on the day, but near the local highs, having charted at 66.00 area post Q3 earnings in mid-November. We had commented on the Q3 earnings results in more detail, link to earlier note below: https://mni.marketnews.com/4qW2boP
- In terms of rating action, the senior unsecured notes, eg VESTL 29s, have been placed at CCC from B-. For reference, the LT Issuer Default Rating (IDR) has moved from B- to CCC+.
- The agency cites in its rationale “operational underperformance versus expectations”, despite Vestel’s cost efficiency measures. The gist of the story remains the lack of financial flexibility and the refi risk, on the back of elevated leverage and persistent free cash flow consumption, which Fitch forecast until ‘28.
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