Nordic Credit Rating (NCR) said today that it had assigned a 'BBB-' long-term issuer rating to Sweden-based commercial property manager Platzer Fastigheter Holding AB (publ) (Platzer). The outlook is stable. At the same time NCR assigned an 'N-1' short-term issuer rating.
Rationale
The long-term rating reflects Platzer's strong market position in Greater Gothenburg, one of Sweden's fastest growing regions. It further reflects Platzer's clear focus on offices and logistics/industrial properties, primarily in attractive locations, as well as its relatively modest financial gearing and strong interest coverage. We take a positive view of Platzer's green credentials; the company's common stock has been certified as green, 90% of its properties have obtained environmental certification, and 61% of the company's loans qualify as green loans.
These strengths are offset by Platzer's relatively high tenant concentrations and ambitious project development pipeline, which has some speculative elements. We view Platzer's relatively weak cash flow and short debt maturity profile with significant maturities concentrated in single years, as negative factors in our assessment of the company's financial risk profile.
Stable outlook
The stable outlook reflects our expectation that Platzer will maintain net loan to value (LTV) below 50%, and keep interest coverage at around current levels. We expect Platzer to continue focusing on commercial properties in the Greater Gothenburg area, while seeking growth primarily through project development. We also expect the company to complete its current development projects without substantial cost overruns or delays. We could raise the rating to reflect improved credit metrics, with net LTV below 40% and interest coverage above 5x over a protracted period, reduced tenant concentrations resulting from a larger and more diverse portfolio, or an improved debt maturity profile with reduced maturity concentrations. We could lower the rating to reflect worsened credit metrics, with net LTV above 50% over a protracted period, deteriorating market fundamentals, adversely affecting occupancy and/or profitability, or increased exposure to and risk taking in development projects.
| Rating list | Rating |
|---|---|
| Long-term issuer credit rating: | BBB- |
| Outlook: | Stable |
| Short-term issuer credit rating: | N-1 |
If you have any questions, please contact:
Marcus Gustavsson, credit rating analyst, +46700442775, marcus.gustavsson@nordiccreditrating.com
Mille O. Fjeldstad, credit rating analyst, +4799038916, mille.fjeldstad@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Methodology published on 14 Aug. 2018 and NCR's Rating Principles published on 16 Sep. 2019. For the full regulatory disclaimer please see the rating report.