...Pharma company Nidda BondCo GmbH's (Stada's) underlying operating performance was strong in 2020, although significant one-offs eroded its margins, limiting its rating headroom. The group continues to benefit from market gains in key European generic markets, such as Germany and Italy, as well as from the upside of a recently acquired OTC businesses in Russia and Central and Eastern Europe. That said, Stada experienced a challenging second half of 2020, due to customers' elevated demand for pharmaceutical followed by purchasing restraint resulting in the depletion and then buildup of inventory stocks. Furthermore, the group incurred large one-off expenses related mainly to foreign exchange volatility from the pandemic weakening the group's profitability. As a result, and given Stada's high debt, we believe that there is limited headroom for the rating if STADA's performance is weaker than for our base case in 2021. Although we do not expect additional major one-off costs in 2021, we see...
