Fitch puts Swedish property group SBB on rating watch negative

FITCH Ratings has placed Swedish real estate group SBB on rating watch negative (RNW), the credit ratings company said on Tuesday (Jul 4).

SBB, one of Sweden’s largest commercial landlords and which owns many rent-regulated residential and community service properties, has been fighting for survival and seen its shares plunge due to concerns over its financial position.

“The RWN reflects heightened refinance risk, and execution risk to receiving disposal proceeds, which have been compounded by certain bondholders claiming that there may be a financial covenant breach,” Fitch said in a statement.

SBB is reliant on receiving disposal proceeds to cover the debt maturities in the coming one to two years of around US$1.63 billion of debt, Fitch said.

“Management has announced plans to complete the disposal of EduCo by end-July, which would substantially reduce refinance risk,” it said.

“Fitch expects to resolve the RWN if, by end-August 2023, there is greater certainty that disposal proceeds, including EduCo, have materially reduced near-term debt refinance risk.” REUTERS