Our 'BB-' issuer rating on Studentbostäder i Norden AB (publ) (Studentbostäder) is unchanged following the publication of its fourth-quarter 2021 results.
Occupancy rates strong
Studentbostäder's fourth-quarter 2021 report was in line with our expectations. Reported revenues in the quarter were SEK 70.6m (compared with SEK 46.6m in the fourth quarter of 2020). The company's NCR-adjusted last-12-month EBITDA margin increased slightly to 44%, compared with 42% a year earlier. Occupancy remained at 96%, unchanged from the previous quarter. Development projects are progressing according to plans.
Loan to value rising, but in line with our expectations
As of 31 Dec. 2021, Studentbostäder's NCR-adjusted net loan-to-value (LTV) ratio was 62.9%, significantly higher than a year earlier, but in line with our expectations for the full year. The company's NCR-adjusted interest coverage remains weak at 1.5x. As calculated according to the company's covenants, interest coverage was 1.6x, compared with the 1.5x covenant stipulation, indicating that covenant headroom remains limited.
Figure 1. Studentbostäder key credit metrics, 2018–2021
| SEKm | 2018 | 2019 | 2020 | 2021 |
|---|---|---|---|---|
| Total revenue | 19 | 102 | 150 | 234 |
| NCR-adj. EBITDA | 3 | 40 | 64 | 103 |
| NCR-adj. EBITDA-margin | 16.2% | 39.1% | 42.4% | 44.0% |
| NCR-adj. investment properties | 894 | 2,098 | 3,573 | 5,649 |
| NCR-adj. net debt | 630 | 1,430 | 1,835 | 3,555 |
| Total assets | 925 | 2,154 | 3,921 | 5,935 |
| NCR-adj. net debt/EBITDA | 207.7x | 35.8x | 28.8x | 34.5x |
| NCR-adj. EBITDA/net interest | 1.0x | 1.9x | 2.1x | 1.5x |
| NCR-adj. net LTV | 70.5% | 68.2% | 51.4% | 62.9% |
| Average remaining lease term (years) | n.a. | n.a. | n.a. | n.a. |
| Occupancy rate | 100.0% | 97.0% | 89.0% | 96.0% |
| Average debt maturity (years) | n.a. | 2.6 | 1.9 | 3.5 |
| Average fixed-interest period (years) | n.a. | 1.7 | 1.7 | 2.1 |
This commentary does not constitute a rating action.
Contacts:
Marcus Gustavsson, analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com