Descent as expected

Credit rating agency S&P Global Ratings has downgraded Samhallsbyggnadsbolaget i Norden AB (SBB), a Swedish landlord, to ‘BB+’ from ‘BBB-‘, due to high leverage and tightening liquidity, and assigned a negative outlook. SBB’s committed credit facilities have halved in the first quarter and the company has significant short-term debt maturities of over SEK 14 billion for the next 12 months, which increases concerns over its liquidity position. The negative outlook reflects the possibility of a downgrade by one notch over the next six to 12 months if SBB does not secure sufficient funding sources to meet upcoming short-term financial obligations in the next few quarters, which would harm its liquidity position.

In terms of creditworthiness, the company is given the highest rating by Berlin-based Scope Ratings, which is sticking to its BBB rating for the company, which has meanwhile been rated at junk level by S&P Global Ratings. Even before these current developments, there were repeated reports of problems that could call into question the investment quality of this company’s securities. It would therefore be consistent with the findings to date if there were further downgrades, especially if Scope Ratings and Fitch Ratings were to lower their ratings as well.