as investors predict higher interest rates will weigh on domestic property prices and expose its vulnerability to tighter bank lending.
Traders’ worries have intensified after S&P on Monday flagged its concerns over the outlook for SBB, one of the market’s biggest players, which needs to refinance short-term debt that matures in the coming year.
Hedge funds’ short positions in the Swedish real estate sector have soared this year, reaching their highest level in over a decade, according to data provider Breakout Point.
FT 11 May 2023
https://www.ft.com/content/97b03a7e-a70f-48a2-b048-332b53edccf3
A botched fundraising by one of Sweden’s most leveraged real estate firms
SBB has assets that analysts reckon are good quality, comprising public buildings such as schools and social housing. Government-backed rental income certainly makes these more attractive than second-grade commercial offices. The snag is the usual one: SBB has too much debt.
S&P Global Ratings this week downgraded the company’s creditworthiness to junk. Net borrowings are 78 billion kronor ($7.6 billion). Some 14 billion kronor matures in the next 12 months, S&P points out.
So SBB’s market capitalization has fallen to just 10 billion kronor from 100 billion kronor in 2021
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