Bulletin: Hemso Fastighets AB's Financial Headroom Used Up Following Portfolio Devaluations and Rising Debt

FRANKFURT (S&P Global Ratings) July 20, 2023--Our ratings and outlook on Sweden-based property company Hemsö Fastighets AB (Hemsö; A-/Stable/A-2) are currently not affected by the company´s increased leverage in the second quarter of 2023, which is slightly beyond current rating downside thresholds of 65%. Hemsö's S&P Global Ratings-adjusted debt-to-debt-plus-equity ratio increased to 66% in the first half of 2023 and breached our rating downside threshold of 65%. The increase followed a like-for-like decline of 3.6% or Swedish krona (SEK) 2.6 billion in portfolio value that resulted from rising yields and an increase in gross debt of SEK3.1 billion to meet investment needs. We understand that the company's management is committed to its financial target of a maximum loan-to-value ratio (LTV)

...July 20, 2023 FRANKFURT (S&P Global Ratings) July 20, 2023--Our ratings and outlook on Sweden-based property company Hems÷ Fastighets AB (Hems÷; A-/Stable/A-2) are currently not affected by the company¦s increased leverage in the second quarter of 2023, which is slightly beyond current rating downside thresholds of 65%. Hems÷'s S&P Global Ratings-adjusted debt-to-debt-plus-equity ratio increased to 66% in the first half of 2023 and breached our rating downside threshold of 65%. The increase followed a like-for-like decline of 3.6% or Swedish krona (SEK) 2.6 billion in portfolio value that resulted from rising yields and an increase in gross debt of SEK3.1 billion to meet investment needs. We understand that the company's management is committed to its financial target of a maximum loan-to-value ratio (LTV) of 60% (reported LTV stood at 60.3% as of the second quarter of 2023), which corresponds to an adjusted debt-to-debt-plus-equity ratio of a maximum 65%. Therefore, we expect Hems÷ will...

Bulletin