Tear Sheet: Hemso Fastighets AB

drop in 2023 and 2024 due to higher refinancing costs, but remain within ratings thresholds. In line with other rated peers in the Nordics, Hemsö has a relatively high exposure to variable interest rates, with about 29% of fixed rate debt maturing over the next year, which will weigh on financial costs over the next 12-24 months (1.8% at Dec. 31, 2022). The company has an average fixed-interest term in the loan portfolio of 5.6 years but close to 30% is maturing in the next 12 months. In the wake of several increases in interest rates over the past few quarters, we believe this will likely result in an overall weaker debt-service capacity and now project S&P Global Ratings-adjusted EBITDA

...We anticipate that Hems÷ Fastighets AB (Hems÷)'s S&P Global Ratings-adjusted EBITDA interest coverage will drop in 2023 and 2024 due to higher refinancing costs, but remain within ratings thresholds. In line with other rated peers in the Nordics, Hems÷ has a relatively high exposure to variable interest rates, with about 29% of fixed rate debt maturing over the next year, which will weigh on financial costs over the next 12-24 months (1.8% at Dec. 31, 2022). The company has an average fixed-interest term in the loan portfolio of 5.6 years but close to 30% is maturing in the next 12 months. In the wake of several increases in interest rates over the past few quarters, we believe this will likely result in an overall weaker debt-service capacity and now project S&P Global Ratings-adjusted EBITDA interest coverage will fall to close to 3.0x-2.8x in 2023 and 2024 compared with 4.8x at Dec. 31, 2022--although this still leaves rating headroom. On a similar note, we forecast average cost of debt...

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