On 1 Dec. 2023, LSTH Svenska Handelsfastigheter AB (publ) announced that it had raised SEK 700m in new preference shares from existing owners to improve its financial flexibility and its ability to act on potential investments. The issue provides enough funds to fully cover a bond maturity of SEK 620m in February 2024, although our base case assumes the company will mostly use bank debt for refinancing.
The issue is the first step in the company's planned revision of its capital structure, aimed at simplifying its capital structure and increasing the transparency of its ownership structure. The amount raised corresponds to the full value of the company's remaining shareholder commitments. We estimate that the company's NCR-adjusted net loan-to-value (LTV) ratio stands at about 47% after the new issue, underscoring the company's commitment to maintaining net LTV below 50% following the sharp decline in property values recorded in the third quarter of 2023. We expect the company to record a decrease in property values in the fourth quarter and that net LTV will stand at about 48%–49% at year-end 2023, in line with our previous estimates.
Related publications:
i) NCR comments: Sharp decline in property values in the third quarter of 2023, publ. 28 Sep. 2023
ii) NCR comments: Svenska Handelsfastigheter publishes plans to revise its capital structure, publ. 15 Aug. 2023
iii) LSTH Svenska Handelsfastigheter AB (publ) 'BBB-' long-term rating affirmed; Outlook stable, publ. 3 Jul. 2023
iv) LSTH Svenska Handelsfastigheter AB (publ) outlook revised to stable; 'BBB-' long-term issuer rating affirmed, publ. 21 Mar. 2023
This commentary does not constitute a rating action.
Contacts:
Gustav Nilsson, analyst, +46735420446, gustav.nilsson@nordiccreditrating.com
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com