Corporate Credit Rating for BORGOSESIA S.P.A. (Upgrade)

modefinance published the Solicited Corporate Credit Rating of BORGOSESIA S.P.A. on the website and the rating assigned to the entity is A3- (Upgrade). The analysis revealed the company has average capability of repaying financial obligations. Possible adverse macroeconomic conditions or different management or strategies might impact on the capability of repaying debt.

The company BORGOSESIA S.P.A. is a joint stock company listed on Mercato Telematico Azionario of Borsa Italiana. It operates on investments and their management on behalf of third party. The Company was founded in 1873 as textile firm and it has changed several ownerships during its history. BORGOSESIA S.P.A. is a group composed by two different divisions: BORGOSESIA REAL ESTATE, with focus on real estate investment, and BORGOSESIA ALTERNATIVE, operative on financial instruments investments.  

BORGOSESIA S.P.A. shows an overall good economic-financial situation, characterized by solid solvency, with an adequate coverage ratio of fixed assets. Profitability is also solid, with expanding indicators. The company has a well-structured Governance, within a Board of Directors and a Board of Auditors adequately composed, while the auditing of the accounts is assigned to an auditing company.

BORGOSESIA, a joint-stock company listed on the Euronext Milan (EXM) market promoted and managed by Borsa Italiana, was established in 1873 and began its activity in the textile and wool sector. In 2006 it finalized the integration process of the real estate sector. At the end of 2021, BORGOSESIA transferred a partnership, signed in 2021, with the CONSULTINVEST GROUP to DDM INVEST III AG, forming BGS MANAGEMENT S.R.L. with equally held capital.
In terms of size, compared to the peer group, the company presents a sufficient level and a solvency that could be considered satisfactory. A well performing profitability confirming its good positioning in terms of growth in turnover and profit.

The sector data, instead, show a sufficient overall health over the reference period. The residential real estate market in 2021 recovered more than expected. In the first nine months of 2021, the number of homes bought and sold increased by 43.1 % year-on-year. A significant contribution to this growth came from the peripheral markets, which showed an increase of 46.6%; purchases and sales in the capital cities were also positive, up 36.1% compared to the first nine months of 2020. Lastly, the macroeconomic picture for Italy shows how the recovery in 2021 has, on the whole, met forecasts, with sustained economic growth that could be confirmed in the coming years.
Recent geopolitical tensions, however, undermine the forecasts, especially as regards maintaining adequate economic growth, with domestic consumption likely to be affected by rising inflation. The 2022 forecast figures are therefore likely to be revised downwards.

In the following table, the addressing factors, actions or events that could lead to an upgrade or a downgrade are summarized:

The present Corporate Credit rating is issued by modefinance under EU Regulation N. 1060/2009 and following amendments.

The present rating is solicited, and based on both private and public information. The rated entity and/or related third parties have provided all private information used. modefinance had access to some accounts and other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available here.

The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available here. For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

modefinance refers to default as a company under bankruptcy, or under liquidation status, or under administration or for which missed payments on a financial obligation are officially recorded.

The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance does not perform any audit activity and is not in a position to guarantee the accuracy of any information used and/or reported in the present document. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.

The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation. No amendments were applied after the notification process.

The rated entity is not a buyer of ancillary services provided by modefinance (credit risk software). The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Head Analyst – Stefania Latin (Rating Analyst)
stefania.latin@modefinance.com
+39 040 3756740

Assistant Analyst – Fabio Politelli (Rating Analyst)
fabio.politelli@modefinance.com
+39 040 3756740

Responsible for Rating Approval – Pinar Dilek
pinar.dilek@modefinance.com
+39 040 3756740