STOCKHOLM, – Ratings agency S&P lowered on Wednesday its credit rating on Swedish real estate group SBB , which is fighting to cut massive debt in the face of high borrowing costs and weak markets, to “selective default”.
SBB is at the centre of a Swedish property market bubble that began to unravel in 2022 when inflation and interest rates soared, triggering sharp cuts to its credit ratings and a plunge in its share price.
Last week, some of its creditors agreed to swap some debt for bonds in SBB’s residential property unit, in the latest step of a wider group restructuring. The swap took place at a deep discount to the original amounts.
“SBB accepted a debt exchange offer for amounts significantly below par, leading to repurchases we regard as tantamount to a default,” S&P said in a statement. The agency said it views the offer as a distressed restructuring comparable to default because the lenders will receive less than they were originally promised.
“Therefore, we lowered to ‘SD’ (selective default) from ‘CCC’ our long-term issuer credit ratings on SBB, and to ‘D’ (default) from ‘CCC’ our issue rating on all rated senior unsecured debt that were subject to the exchange offer.”
Source Homevior.in
