Nordic Credit Rating said today that it had affirmed its 'A-' long-term issuer rating on Swedish community service property manager Vacse AB (publ). The outlook is stable. The 'N2' short-term issuer rating and the 'A-' senior unsecured issue rating were also affirmed.
Rating rationale
The affirmation reflects Vacse's strong financial position, conservative financial risk management, low financial leverage, robust interest coverage and supportive ownership. On 1 Apr. 2025, Vacse raised SEK 894m in new equity and added Telia Pensionsstiftelse as a new owner, enhancing financial flexibility and reducing leverage. In addition, the company assumed a NIB loan of SEK 550m with a tenor of 15 years in May, increasing average debt maturity by 1.6 years. The loan was taken despite limited refinancing needs, which we believe underscores Vacse's conservative liquidity management.
We expect Vacse to use the proceeds for acquisitions and projects as opportunities arise. However, the timing of any increase in net debt remains uncertain, given the company's disciplined approach to acquisitions and typically long lead times before cash outflows. The company has two contracted acquisitions in 2026 and a longer-term project for the construction of a police station in Täby, a suburb to Stockholm. We expect related cash outflows of approximately SEK 1.2bn through 2026–2027.
We expect Vacse to maintain a sizable cash buffer, supporting a net LTV of approximately 29–33% and interest coverage of 4.8–5.1x over our forecast period ending in 2027. The company's operating cash flow to debt is expected to remain among the strongest in the Swedish real estate sector, with net debt/EBITDA of 6.6–7.7x. Overall, we believe Vacse's financial risk profile has improved, reflecting conservative financial risk management, lower expected financial leverage and greater financial flexibility.
The rating reflects the company's strong portfolio of modern, tailor-made properties leased on long contracts to highly creditworthy public-sector authorities that are essential to Sweden's public security. It also reflects its high operating efficiency and virtually 100% occupancy rate. We take a positive view of the company's low development risk as projects are carried out on fixed-price contracts, typically with payment upon completion. The rating is supported by Vacse's long fixed-interest periods, strong liquidity and balanced debt maturity profile. It is also underpinned by strong owners with a commitment to maintaining a stable financial risk profile.
These strengths are offset by the limited number of Vacse's properties (26) and tenants, with the top 10 tenants generating most of the company's revenues. We believe the concentrations in Vacse's portfolio create some risk at contract expiry, although the risk is low due to negligible lease maturities over the next few years.
Stable outlook
The stable outlook reflects our expectation that Vacse will continue to grow through contracted acquisitions of development projects while maintaining its low risk financial profile. We anticipate interest coverage and debt to operating cash flows will remain strong, supported by stable long term rental contracts with solid counterparties. The outlook also incorporates our view that Vacse will maintain a conservative approach to risk management.
We could raise the rating to reflect stronger credit metrics together with significant portfolio growth and diversification that do not compromise the company's low-risk business profile.
We could lower the rating to reflect net loan-to-value above 45% or EBITDA/net interest below 3.5x over a protracted period, any deviation from the company's low-risk business profile, or an adverse change in ownership or the owners' risk appetite.
Related rating actions
i) Vacse AB (publ) 'A-' long-term issuer rating affirmed; Outlook stable, 16 Oct. 2024.
Related publications
i) Strong financing climate for Swedish real estate companies in an uncertain environment, 16 Sep. 2025.
ii) Swedish real estate snapshot (Q2 2025): Compressing credit margins upon refinancing expected to improve interest coverage, 1 Sep. 2025.
iii) Swedish real estate snapshot (Q1 2025): Strong access to capital contains financial risk, 27 May 2025.
iv) Comparison of NCR-rated community service property managers, 9 Dec. 2024.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A- | A- |
| Outlook: | Stable | Stable |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | A- | A- |
Contacts:
Gustav Nilsson, analyst, +46735420446, gustav.nilsson@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.