Nordic Credit Rating (NCR) has affirmed its 'A' long-term issuer rating on Norway-based property manager Bane NOR Eiendom AS. The outlook is stable. The 'N2' short-term issuer rating and 'A' senior unsecured issue rating were also affirmed.
Rating rationale
The affirmation reflects our expectation that Bane NOR Eiendom's credit metrics will remain moderate over the forecast period, supported by increasing EBITDA and cash inflows from the sale of completed properties. We project net loan-to-value (LTV) of approximately 36% by 2028 and EBITDA to net interest coverage (ICR) of around 2.3x by 2028, following a temporary decline during a period of elevated investment.
Interest coverage remained under pressure in 2025, with an ICR of 2.1x, below our prior expectation of 2.4x. EBITDA was broadly in line with forecasts, but higher debt and increased interest costs weighed on the ratio. We continue to expect debt to rise in 2026 due to elevated capex for ongoing projects, resulting in a projected ICR of 1.8x. As interest coverage is an operating metric, we do not believe it fully captures the company's debt service capacity, since a portion of its activities relates to property development for sale, generating cash flows not reflected in EBITDA. We expect cash proceeds from property sales to support liquidity and partially mitigate risks associated with weaker interest coverage.
As noted in the previous review, we expect lower capital expenditure from 2027, along with improved EBITDA and sales proceeds, to stabilise debt levels and strengthen credit metrics. Committed capital expenditure is below projections from 2027, and we anticipate management will defer projects if liquidity is insufficient.
The long-term issuer rating continues to reflect the company's moderate leverage, solid average remaining lease term and high proportion of government-funded tenants. The rating is supported by the company's monopoly over domestic railway stations and workshops, as well as its importance to Norwegian railway infrastructure.
The rating is constrained by the size of Bane NOR Eiendom's management portfolio, although this is largely offset by the specialised nature of the properties, and by the company's revenue concentrations and the risks associated with development projects. While asset sales support liquidity, their contribution is subject to year‑to‑year variation due to uncertainty in disposal timing.
We continue to add two notches to our standalone credit assessment to reflect Bane NOR Eiendom's 100% indirect ownership by the Norwegian government and our view that the government has a strategic interest due to the company’s role as a provider of critical public transport infrastructure.
Stable outlook
The stable outlook reflects our expectation that Bane NOR Eiendom's credit metrics will remain moderate through 2028, despite continued high capital spending and an expected increase in debt in 2026. The outlook also incorporates our view that the company will divest completed projects, supporting cash flow and mitigating the impact of periods of weaker interest coverage. In addition, strong footfall at the company's railway stations supports occupancy and enhances the attractiveness of its property locations.
We could raise the rating to reflect an LTV ratio of around 20% and an EBITDA margin above 65% for a prolonged period. We could also raise the rating to take into account improved profitability and revenue stability, or to reflect a strengthened financial policy through tighter leverage targets.
We could lower the rating to reflect net LTV above 40% and net interest coverage below 2.0x over a prolonged period, or to take into account weaker profitability or an inability to achieve competitive prices on development properties.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A | A |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | A | A |
Contacts:
Anine Gulbrandsen, analyst, +4797501657, anine.gulbrandsen@nordiccreditrating.com
Sean Cotten, lead senior analyst, +46735600337, sean.cotten@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Rating Methodology published on 8 May 2023, NCR's Rating Principles published on 14 Feb. 2024 and NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024. For the full regulatory disclaimer please see the rating report.