Our 'BBB+' issuer and issue ratings for Fastighets AB Stenvalvet (Stenvalvet) are unchanged following the publication of its mid-year results. Rental revenue, EBITDA and property valuation were largely in line with our expectations, and the credit metrics remain fully commensurate with our 'BBB+' rating.
Rental income in line with expectations, portfolio marginally improved
Rental income of SEK 218m (compared to SEK 204m in Q2/2018) and EBITDA of SEK 142m (140m) in the second quarter of 2019 are both in line with our expectations resulting in an EBITDA margin of 69.6% (69.8%). The property portfolio totalled SEK 12bn as of 30 Jun. 2019, corresponding to a 12-month rolling yield of 5.1% (5.5%). The company marginally increased their occupancy ratio to 96.5%, increasing their revenue exposure towards governments and municipalities (73%) and lengthening their average lease time to 6.3 years.
Financial position remains stable and strong
Stenvalvet reported a loan to value (LTV) of 49.7%, EBITDA to net interest of 5.7x and net debt to EBTIDA of 10x. The company's financial metrics thus commensurate with our 'BBB+' requirements. Stenvalvet has SEK 1.6bn of debt maturing within the next 12 months. The company increased their back-up facilities during the quarter and hold SEK 337m in cash and equivalents as well. In addition, Stenvalvet has an owner commitment of SEK 500m in equity injections. The planned divestment of properties totalling SEK 1.1bn during 2019 will further strengthen the company's liquidity position, while the project pipeline remains in line with expectations. Stenvalvet reports that the progress with the MTN program is on track and expect it finalised during fall 2019.
We expect the company to continue its stable development as well as proactive lengthen strengthen its debt maturity profile.
This commentary does not reflect a rating action.
For more information, please contact:
Mille O. Fjeldstad, Credit Rating Analyst, +47 99 03 89 16, mille.fjeldstad@nordiccreditrating.com
Michael Andersson, Chief Rating Officer, +46 732 32 43 22, michael.andersson@nordiccreditrating.com