Nordic Credit Rating has revised the outlook on its 'BBB-' long-term issuer rating on Sweden-based property manager commercial property manager Platzer Fastigheter Holding AB (publ) to stable from negative. At the same time, the long-term rating and 'N4' short-term issuer rating were affirmed. We raised the senior unsecured issue rating to 'BBB-' from 'BB+' to reflect our expectations of reduced secured debt in the capital structure.
Rating rationale
The outlook revision reflects our view that uncertainty around Platzer's financial metrics has decreased following the company's 17 Jan. 2025, announcement to divest a property in Södra Änggården for SEK 552m. The divestment follows a SEK 1.8bn acquisition in December 2024 and reduces the likelihood that Platzer's financial metrics will weaken more than we projected. In addition, the planned sale demonstrates the company's commitment to its financial policy.
In our base-case forecast, we expect Platzer's net loan-to-value (LTV) to temporarily exceed its financial policy level of 50% in 2024, before returning to below 50% in 2025. We also anticipate that the company's net interest coverage will improve and remain above 2.5x on a lasting basis. We believe Platzer is committed to its financial policy and expect the company to take mitigating actions when necessary.
We have raised our senior unsecured issue rating to 'BBB-' from 'BB+'. As of 30 Sep. 2024, Platzer's gross secured LTV was 38%. We now expect it to remain below our 40% threshold, improving recovery prospects for unsecured debt holders.
Stable outlook
The stable outlook reflects Platzer's commitment to keep its net LTV below 50% over time, in line with its financial policy. Following the sizeable acquisition in December, we expect Platzer's net LTV to temporarily exceed 50% in 2024. However, we anticipate it will revert to below 50% this year, with net interest coverage improving and remaining above 2.5x during our forecast period through 2027. We believe Platzer will continue to focus on commercial property in the Greater Gothenburg area and grow through project development.
We could lower the rating to reflect worsening credit metrics (net LTV above 50% or EBITDA/net interest below 2.5x) over a protracted period, deteriorating market fundamentals that adversely affect occupancy and/or profitability, or to reflect increased exposure to and risk taking in development projects.
We could raise the rating to reflect strengthened credit metrics (net LTV) below 40% over a protracted period), an improved debt maturity profile with reduced maturity concentrations, or to reflect efforts to significantly reduce project risk exposure relative to its portfolio.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | BBB- | BBB- |
| Outlook: | Stable | Negative |
| Short-term issuer credit rating: | N4 | N4 |
| Senior unsecured issue rating: | BBB- | BB+ |
Contacts:
Yun Zhou, analyst, +46732324378, yun.zhou@nordiccreditrating.com
Elisabeth Adebäck, analyst, +46700442775, elisabeth.adeback@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Rating Methodology published on 8 May 2023, NCR's Rating Principles published on 14 Feb. 2024 and NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024. For the full regulatory disclaimer please see the rating report.