Our 'BB-' long-term issuer rating for Offentliga Hus i Norden AB (publ) (Offentliga Hus) is unchanged following the publication of its third-quarter results.
Property acquisitions and new external funding
During the quarter, Offentliga Hus has acquired a larger property portfolio which will increase the company's property portfolio by SEK 1.1bn, commencing during the fourth quarter. We expect this to improve rental incomes somewhat during the fourth quarter. The company has further increased its external funding through the issuance of a SEK 500m in green bonds and SEK 500m in hybrid bonds, using some proceeds to repurchase SEK 132m in outstanding bonds.
During the quarter, Offentliga Hus presented new financial and operational targets as well as announced changes to the management team, which we viewed as positive developments in our previous comment.
Continued growth with financial postition as expected
Third-quarter rental income of SEK 80.6m (compared to SEK 51.1m in Q3/18) and EBITDA of SEK 50m (compared to SEK 26m) were in line with our expectations. Offentliga Hus' reported loan to value (LTV) remains stable around 62%, net interest coverage ratio of 1.8x and net debt to EBITDA of 18x (NCR metrics can differ slightly from reported metrics). We expect the credit metrics to remain stable going forward given the company's financial and operational targets, however, we do not expect significant deleveraging due to the company's growth ambitions.
For more information, please contact:
Mille O. Fjeldstad, +47 99 03 89 16, mille.fjeldstad@nordiccreditrating.com
Sean Cotten, +46 735 600 337, sean.cotten@nordiccreditrating.com
This commentary does not reflect a rating action.