Nordic Credit Rating (NCR) said today that it had affirmed its 'BBB' long-term issuer rating on Sweden-based property manager Bonnier Fastigheter AB (Bonnier Fastigheter). The outlook is stable. At the same time, NCR affirmed its 'N-1+' short-term issuer rating and 'BBB' senior unsecured rating on instruments issued by subsidiary AB Bonnier Fastigheter Finans (publ). The issuer and issue ratings are no longer under criteria review.
Rating rationale
On 18 Feb. 2022, NCR published its new Group and Government Support Methodology. At the same time, it placed the issuer rating on Bonnier Fastigheter and the ratings on senior unsecured instruments issued by AB Bonnier Fastigheter Finans (publ), which is fully guaranteed by Bonnier Fastigheter, under criteria review. Using the rating principles for special-purpose financing entities, defined in the new methodology, we have assigned a 'BBB' long-term issuer rating and an 'N-1+' short-term issuer rating to AB Bonnier Fastigheter Finans (publ). The outlook is stable.
Stable outlook
The stable outlook on the parent reflects our expectations that Bonnier Fastigheter's credit metrics will weaken from their currently strong levels as the company pursues a portfolio value target of SEK 25bn by 2025. We expect this weaker financial position to be offset by a stronger business profile, due to a larger and less concentrated property portfolio, possibly with meaningful residential exposure. We could raise the rating to reflect an increased proportion of residential properties under management, combined with a financial risk profile that is significantly stronger than we currently expect. We could lower the rating to reflect deteriorating market fundamentals that could reduce profitability, or substantially weaker credit metrics such as net loan to value above 50% and net interest coverage below 5x over a protracted period.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB | BBB |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N-1+ | N-1+ |
| Senior unsecured issue rating*: | BBB | BBB |
| *Issued by AB Bonnier Fastigheter Finans (publ). | ||
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Rating Methodology published on 18 Feb. 2022, NCR's Group and Government Support Rating Methodology published on 18 Feb. 2022 and NCR's Rating Principles published on 16 Sep. 2019. For the full regulatory disclaimer please see the rating report.