Research Update: Hemso Fastighets AB 'A-' Ratings Affirmed Following Transition To Corporate Rating Methodology; Outlook Stable

On June 3, 2021, S&P Global Ratings placed Hemsö Fastighets AB on CreditWatch with negative implications on its view that Hemsö's mission is to maximize profits rather than provide a public service, hence falling out of scope for the updated "Methodology For Rating Public And Nonprofit Social Housing Providers" criteria. However, we continue to recognize the company's very high cash flow stability and solid EBITDA interest coverage from its assets, despite its elevated debt leverage under our criteria for corporates, and think it would likely benefit from extraordinary support from its main shareholder The Third National Pension Fund (AP3), which owns 85% of the company, in case of financial distress We therefore affirmed our 'A-/A-2' issuer credit rating and 'K-1'

...- On June 3, 2021, S&P Global Ratings placed Hems÷ Fastighets AB on CreditWatch with negative implications on its view that Hems÷'s mission is to maximize profits rather than provide a public service, hence falling out of scope for the updated "Methodology For Rating Public And Nonprofit Social Housing Providers" criteria. - However, we continue to recognize the company's very high cash flow stability and solid EBITDA interest coverage from its assets, despite its elevated debt leverage under our criteria for corporates, and think it would likely benefit from extraordinary support from its main shareholder The Third National Pension Fund (AP3), which owns 85% of the company, in case of financial distress - We therefore affirmed our 'A-/A-2' issuer credit rating and 'K-1' short-term Nordic regional scale rating on Hems÷, three notches above the '###-' stand-alone credit rating, applying our "Key Credit Factors For The Real Estate Industry." - We also affirmed our senior unsecured issue rating...

Research Update