Heimstaden - comment

Heimstaden released its Q2 numbers this morning followed by their conference call at 9 am.  Naturally, there is little change in the operational data, with all focus on the -1.5% reduction in Fair Value adjustment.  This has led to reported LTV rising to 55.1% and ICR (S&P) falling to 1.8x.  

No mention (in the press release) of an equity raise, although it was raised several times in the Q&A.  Management acknowledged they continue to be in conversation with its shareholders but no meaningful conclusion has been reached.  They also confirmed there will be no dividend paid this year.  Fitch has affirmed BBB rating but with a revised outlook to negative watch.  We await an update from S&P as we suspect the Company and its shareholders are unlikely to reach an agreement prior to a downgrade to BBB-.