On 20 Jun. 2022, Sweden-based property manager Fastighets AB Stenvalvet (publ) published new financial targets for net loan to value (LTV) and interest coverage. Under the new targets, the company must maintain net LTV (excluding shareholder loans) below 50% (55% previously) and keep interest coverage above 3x on a sustained basis. We view the new targets as an indication of the company's commitment to a low financial risk profile.
At the same time, Stenvalvet announced that it would repay SEK 1bn of shareholder loans currently amounting to SEK 2.8bn before 30 Jun. 2022. The decision was partly due to a reduction in financial leverage following divestments of properties for SEK 2.1bn in the first quarter. Following the repayment, we expect net LTV to increase to about 41% (as of 31 Mar. 2022) from 35.4% on the same date. In our view, Stenvalvet's credit metrics remain strong. We regard the transaction as credit neutral.
This commentary does not constitute a rating action.
Contacts:
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com