Bond from Rene Benko's Signa company downgraded to scrap: Financial expert warns against investing despite high returns

Bond from Rene Benko's Signa company downgraded to scrap: Financial expert warns against investing despite high returns

According to a report by finanzmarktwelt.de,

The recently published article on finanzmarktwelt.de highlights the current situation of the bond from Rene Benko's Signa group of companies. The bond was just downgraded to scrap level by Fitch Ratings, pointing to the liquidity difficulties and serious financing problems in Benko's empire. Investors are putting massive pressure on Benko to hand over the helm and a possible takeover by a restructuring expert is being discussed. The bond, due in 2026, has already lost more than half of its value, highlighting the empire's dire situation.

The downgrade of the bond to scrap level is a clear indicator of investors' loss of confidence in Benko's group of companies. This is likely to make future financing options more difficult and more expensive. Additionally, the downgrade could impact Signa's overall creditworthiness and lead to further liquidity issues. This in turn could have a negative impact on ongoing real estate projects, such as the construction of the Elbtower in Hamburg, and lead to delays or even a halt to construction.

The bond downgrade could also impact the bond and financing markets by shaking confidence in similar investments and leading to higher risk premiums. This could make it more difficult for other companies with similar financing difficulties to raise capital.

Investors now have to make an important decision about future support for Benko's group of companies and the provision of additional funds. The uncertainty about Signa's future financial situation and the possible restructuring by an external expert are likely to lead to further turbulence in the financial markets, which could potentially also affect other investors and companies. It remains to be seen whether Benko and its co-shareholders will be able to provide the necessary funds for the restructuring and regain the trust of investors.

The upcoming maturities of Signa Prime and Signa Development show that the empire's financial challenges will continue in the near future. It is questionable whether shareholders are prepared to provide additional funds to solve liquidity problems and secure ongoing projects. The development of the Signa bond and the associated financing difficulties represent an important indicator for the future of Signa and possibly also for the real estate industry as a whole.