Heimstaden Bostad/Heimstaden AB - comment

Christian Fladeland, Heimstaden’s co-CEO, was interviewed for a podcast, where he continued the upbeat tone investors heard on the Q1 conference call.  Despite some comments about being able to deal with a downgrade to High Yield, the main (and only) aim is to maintain Investment Grade ratings, and to keep access to the bank market.  The co-CEO did feel current trading yields for the unsecured were high given the company's relative strength but acknowledged some governance issues were keeping them at these levels.  They continue to view the Hybrids as an equity instrument, and all decisions would be made to prioritise liquidity and maintain ratings at the Bostad level.

At AB, the loss of the unutilised bank facilities was due to the fact there are no distributions from Bostad, and therefore the facility was no longer available.  Despite the large discount attainable for the Company to purchase the euro bonds, they remained focused on the shorter-term Swedish Kroner bonds.  AB has some options to continue its deleveraging, and the co-CEO mentioned the possibility of partnership, selling down its stake in Bostad, and potentially taking a co-investor at AB level.  He was dismissive of pursuing the private debt option at the AB level, given its relative expense versus his view on the underlying assets. 

Finally, concerning the recently launched Heim Global Investor, there is a clear non-compete in the shareholder agreement that would make it difficult for this new entity to acquire assets from Heimstaden Bostad.