Nordic Credit Rating (NCR) said today that it had placed its 'BB' long-term issuer rating on Swedish community service property manager
The Watch placement signals a high likelihood of a one- or two-notch upgrade in the next 90 days pending the outcome of an anticipated offer by SBB to the remaining shareholders in Offentliga Hus.
Rationale
On
The transaction is expected to close on
NCR understands that SBB is committed to acquiring a larger share of the company and consequently we expect SBB to make an attractive offer for the remaining shares in Offentliga Hus. Both Offentliga Hus and SBB focus on the community service property market and we believe a likely outcome would be for SBB to merge the operations of Offentliga Hus into its own, in a manner similar to its acquisition of
Watch positive
The Watch placement reflects our expectation of one of the following two outcomes materialising within the next 90 days;
We could raise the long-term issuer rating by up to two notches upon resolution of the Watch placement, depending on SBB's resulting equity stake and ownership control. As SBB has a stronger credit profile than Offentliga Hus, we view the commitment to a higher ownership stake as positive for Offentliga Hus' financial profile and creditworthiness as well as its outstanding obligations.
We could affirm the ratings on Offentliga Hus should SBB's ownership share remain in line with the announced acquisition of 54.3% without any material impact on Offentliga Hus' financial position, or if a deal is not finalised.
We will closely monitor any changes in Offentliga Hus' ownership. We expect to resolve the Watch placement within three months.
All research for this issuer is available here.
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The methodology documents used for this rating are NCR's Corporate Methodology published on
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