Moody's downgrades Storskogen

Moody's Investors Service said it downgraded Storskogen Group AB's family rating to Ba3 from Ba1 and its probability of default rating to Ba3-PD from Ba1-PD.

"The downgrade reflects the risks of the deteriorating operating environment, both at the level of investments because of weakening macroeconomic conditions as well as at the holding company level. It also takes into account higher funding costs at a time when the company needs to refinance SEK 10.6 billion before the end of September 2024,” said Daniel Harlid, a Moody's vice president, senior analyst and the lead analyst for Storskogen, in a press release.

Storskogen’s interest rate exposure is tied to short-term rates and only a small portion of it is hedged, the agency noted.

“While we note ongoing efforts to improve operating performance of its over 130 business units, its access to capital and underlying cash flow generating ability remains more uncertain in the current environment," Harlid said.

The outlook remains unchanged at ratings under review.

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