Fitch gives Heimstaden Bostad notes BB+

Fitch Ratings said it gave Heimstaden Bostad AB's planned €1 billion of perpetual capital securities an expected BB+ rating. The hybrid may be issued in one or two benchmark-sized tranches.

“The rating is line with Heimstaden Bostad's existing subordinated debt rating,” the agency said in a press release.

The securities are rated two notches below Heimstaden Bostad's long-term issuer default rating of BBB. “This reflects the hybrids' deeply subordinated status, ranking behind senior creditors and senior only to equity (ordinary and preference shares), with coupon payments deferrable at the discretion of the issuer and no formal maturity date,” Fitch said.

The proceeds will be used to partly finance the acquisition of a large portfolio of residential property from Akelius Residential Property AB comprising properties in Sweden, Germany and Denmark for SEK 92.5 billion.

The outlook is stable.

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