S&P: Strategic Growth Investments Expected Despite Potential Cash Flow Challenges
S&P Global Ratings has reported an improvement in the credit rating distribution of the 15 Turkish companies it assesses, noting that these firms are anticipated to continue investing in strategic growth projects this year. The recent report highlights that the enhancement in company ratings aligns with Turkiye’s upgraded country rating.
Since December 2023, 11 companies have received rating upgrades, with 40% of issuers now holding a positive outlook. This positive shift is attributed to Turkiye’s sovereign credit rating being raised to “B+”.
Corporate Ratings Benefit from Sovereign Upgrade
“Corporate ratings have benefited from the improvement in Turkiye’s country rating, and some companies’ outlooks remain tied to the sovereign rating,” the report states.
Despite the optimistic outlook, the report also cautions that investments in strategic growth projects could negatively impact cash flow, primarily due to high interest expenses.
Moreover, the report notes that the European bond market has reopened to some Turkish companies, with recent bond issuances helping to bolster issuers’ liquidity buffers, although the average debt maturity profiles remain relatively short-term.
Source: Trthaber / Prepared by Irem Yildiz