Heimstaden Bostad - comment

Heimstaden Bostad Deputy CEO gave an interview yesterday outlining a slight change to their privatisation (asset sales) program, with SEK 10bn of asset sales in FY24 and SEK 15bn in FY25, with moderate amounts this year SEK 300-500m. The interview reiterated previously made comments including that a downgrade to BBB- would be manageable and that the Company has sufficient near-term liquidity. However, he confirmed that the board will speak with its shareholders regarding additional equity to support its BBB rating. 

There is a separate, more bullish press article, apparently signed off by management, stating that Bostad does not need a capital contribution. We consider this the kind of tough talk we would expect management to engage in. Investors will not want to see negotiations between shareholders and the Company taking place in the media. Although we agree that the Company have sufficient liquidity, Bostad should find it nearly impossible to maintain their IG status without a capital injection. So other than some timing update of the divestment plan, we are not finding much news in today’s headlines.