Our 'A-' issuer rating on Swedish property company
Earnings metrics in line with expectations
HEBA's fourth-quarter report was in line with our expectations. Revenues in the quarter were
The company remains unaffected by the ongoing COVID-19 pandemic. The residential property market is robust with no signs of tenants struggling to pay rent and given ongoing government support for furloughed employees. HEBA's vacancy rate remains low.
HEBA finalised four renovation projects during 2020, and will aim to finalise five projects in 2021 in accordance with its overall aim of rejuvenating the portfolio. As of end-2020, the project portfolio included approximately 1,600 apartments under construction; these are located in seven rental properties, five properties for sale, and two properties designed for the elderly. Under a 50/50 joint venture with construction company Åke
Focus on reducing dependence on secured debt
HEBA launched a
HEBA's interest coverage ratio was 4.6x as of end-2020, unchanged from a year earlier. The average debt maturity was 4.0 years (2.5 previously) and the average interest fixing 3.4 years (3.3). As of end-2020, HEBA's reported loan-to-value ratio had increased, as we expected, to 40.8%.
Some 53% of HEBA's debt matures within the next 12 months, with more than half being commercial paper. The company's liquidity profile remains adequate, with cash holdings of
This commentary does not constitute a rating action.
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