Our financial strategy aims to maintain rigorous financial discipline, in line with the investment grade profile, in order to limit the exposure to financial risks (interest rate and credit) and obtain the best market terms and conditions possible.
The main golas are to further reduce the Loan to Value, improve our liquidity profile in order to meet short-term needs, maintain a balance between bank and market debt in order to further reduce the average cost of debt and allocate maturities effectively over the medium term.
Financial solidity and prudent management are part of the IGD Group’s DNA.
In 2019 we worked intensely on the Group’s financial structure: we obtained two investment grade ratings from two different agencies: in April S&P Global Ratings assigned IGD a rating of “BBB-” (currently with a negative outlook), and then in October Fitch Ratings Ltd assigned IGD a “BBB-” rating with a stable outlook”. In November, lastly, we issued a 400 million euro bond (maturity 2024, yearly fixed rate 2.125%); the proceeds from the issue were used, in part, to partially repurchase two existing bonds, and in part, to fully repay the bond expiring in 2021, as well as for general corporate purposes.
All of this made it possible for IGD to obtain the results described below:
Average cost of debt
the decrease in average cost of debt, which fell from the 2.65% recorded in 2018 to 2.35% in 2019;
a balanced debt structure with the portion of bond debt equal to 55% of total debt at 31 December 2019 and the bank debt that is the remaining 45%;
Interest cover ratio
the Interest Cover Ratio went from 3.47x at year-end 2018 to 3.8x at 31 December 2019.
In the first 6 months of 2020, following the global epidemiologic emergency from COVID-19, based on their estimates as to the impact that this extraordinary situation will have, all the rating agencies revised their opinions on IGD: S&P Global Ratings and Moody’s downgraded IGD’s rating from BBB- to BB+ with a negative outlook and from Ba1 to Ba2 with a stable outlook, respectively; Fitch Ratings confirmed its BBB- rating with a negative outlook.
The rating obtained by Fitch is currently the only one in the investment grade area attributed to IGD.