Our 'BBB+' issuer and issue ratings for Vacse AB are unchanged following the publication of its 2018 results.
Results as expected
The results for 2018 for Vacse are mostly as expected, except for a higher than anticipated increase in unrealised property value. The company decreased its yield requirement from 5.8% to 5.6% in 2018, resulting in an unrealised change in property value of SEK 267m, of which SEK 167m due to the revaluation dated 31 Dec. 2018. The NCR adjusted EBITDA/interest and LTV for 2018 is thus marginally stronger than expected due to lower interest costs and higher property values, however the improvement does not affect our view of the company.
Stronger financial position
During the fourth quarter, Vacse settled its shareholder loan of SEK 1,454m, which did not affect our debt ratios as we exclude shareholder loans in our adjusted net debt calculations or net interest costs calculations. Since the end of the year, Vacse has expanded its 18/23 FRN by SEK 300m and redeemed SEK 280m of the two bonds maturing in June, supporting our expectations of a proactive refinancing strategy. Bonds maturing in June 2019 and commitments for planned acquisitions amount to a total funding need of SEK 625m. This compares to SEK 600m in revolving credit facilities available, and our expectations of continued stable cash flow generation.
Thus far in 2019, Vacse has entered into two new agreements; a 20-year contract commencing in the summer of 2022 for the Courts Administration and a 25-year contract with municipality of Öckerö for the primary school which commences in 2021.
This commentary does not reflect a rating action.
research Issuer comment Nordic Credit Rating - Vacse AB (publ) 2018 results 5 Feb. 2019.pdf (85.91 KB) Real estate Vacse AB (publ) Real Estate