2023-06-19 09:17:32
The shares of the Swedish real estate company Fastpartner suffered a fall of more than 8% on Monday at the opening of the Stockholm Stock Exchange, after the company’s debt rating was downgraded last Friday to speculative grade the ‘bono basura’ by Moody’s agency.
Specifically, the risk rating agency downgraded Fastpartner’s solvency score by one notch, lowering it to ‘Ba1’ from ‘Baa3’ and also placing it under review for possible additional discounts.
Moody’s decision reflects the rapid increase in interest rates combined with the subsequent challenges of the capital markets with increasing credit spreads, that financing costs continue to rise significantly, reflected in weaker interest coverage ratios.
However, Moody’s expects Fastpartner’s operating performance to remain strong over the next few quarters with further revenue growth due to inflation-linked rents in a significant portion of the portfolio or the ability to renegotiate rents.
“However, in Moody’s opinion, it is these improvements are unlikely to be enough to offset pressure on valuations and higher financing costs“, the agency said.
In response to the downgrade, Sven-Olof Johansson, CEO of Fastpartner, stressed that the real estate company has worked hard to bolster its financial stability by extending the terms of its existing bank loans.
“The significance of these measures is that We have liquidity to meet all debt maturities for a term of more than 30 months”said the executive, who, in light of this and the company’s relatively low proportion of outstanding bond loans, the credit rating downgrade “has marginal importance” to the company’s day-to-day operations.
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