Akelius Residential Property AB

Overview Key strengths Key risks Good predictability and a recurrence of cash flow generation are supported by the resilience of the company?s residential assets located in large metropolitan cities where demand remains solid and new supply limited. Reduced financial prudence, following the payment of an exceptional dividend of €1.3 billion in November 2023, which led to an increase in debt-to-debt-plus-equity to above 50% (53.5% year-end 2023). Solid diversity of the company?s €5.8 billion portfolio (as of March 31, 2024), in terms of countries and cities (the largest city Toronto represents 19% of the portfolio value), spread across 19,661 apartments, with a large tenant base. Future growth in EBITDA depends on the company?s future investment plans, where details and timing are

...Akelius Residential Property AB's (Akelius') gradual draw down on the financial guarantee provided by its parent, should lead to a progressive improvement of credit metrics in the upcoming 12-24 months. As part of the 1.3 billion exceptional dividend announced in November 2023 (see Residential Property Firm Akelius Downgraded To `###¡' On Unexpected Proposed Exceptional Dividends; Outlook Stable, published on Dec. 5, 2023), Akelius received a 1.1 billion financial guarantee from its main owner to be used solely for debt repayment purposes. We estimate that the guarantee will be sufficient to cover the Swedish krona (SEK) 854 million bond due November 2024 and the 600 million bond due February 2025, following the repayment of the 500 million bond that came due in March 2024. We therefore expect the company's debt-to-debt-plus-equity ratio to gradually improve from 53.5% at end-2023 to 43%- 45% in 2024 before stabilizing at about 35%-40% at end-2025. We expect a similar trend to occur with...

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