Fitch slices SBB

Fitch Ratings said it downgraded Samhallsbyggnadsbolaget i Norden AB's long-term issuer default rating to B- from BB+ and its senior unsecured debt rating to B+ from BB+. The agency revised the recovery rating to RR2 from RR4.

The ratings remain on rating watch negative.

“The downgrades reflect SBB's deteriorating liquidity stemming from i) insufficient progress on raising enough liquidity - primarily through asset disposals - to reduce refinancing risk as it approaches its SEK 6.8 billion February 2024 bond maturities and ii) unfavorable real estate and capital-market conditions. SBB continues to undertake asset disposals but execution risk remains high,” Fitch said in a statement.

The agency noted SBB's available liquidity at end-1H23 (SEK 4.1 billion of cash and available credit lines) was not enough to cover its debt maturities within the next 12 months (end-1H23: SEK 14.6 billion) despite an additional SEK 2.4 billion from its August 2023 preference share issue.

Fitch said it plans to resolve its RWN on further news on raising the liquidity, especially as the February 2024 maturities approach.

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