Fitch upgrades SBB

Fitch Ratings said it upgraded the Samhällsbyggnadsbolaget i Norden AB's (SBB) long-term issuer default rating to BB+ from BB and placed it on Rating Watch positive.

Fitch also said it assigned an expected BB- rating to SBB's proposed €300 million hybrid bond.

The hybrid is rated two notches lower than SBB's current issuer default rating, the agency said.

The positive watch reflects the plan by SBB to actively manage its portfolio mix toward social infrastructure and residential properties, Fitch said.

When this is completed in the short-term, the agency said it expects to further upgrade the issuer default rating to BBB- and assign a stable outlook.

The proposed hybrid will be used to repay secured debt, leaving more assets unencumbered to the benefit of unsecured creditors, Fitch said.

SBB has progressively improved its capital structure by removing legacy issues, developed its access to capital and improved its corporate governance, the agency said.

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