SBB - comment

Not much inspiration on the call, net cash flow was lower than we hoped mainly due to the repayment of CP and some reduction in bank debt. Rolling over bank lending is crucial if the company is to survive without a reorganisation, but SBB’s banks haven’t agreed yet. SBB has SEK6bn of bank debt due in the next 12 months. Management hopes to agree with its bank lenders in Q3. The banks playing hardball on extending may have been the prompt for SBB to begin to talk to a group of bondholders (who are being advised by PJT). SBB wouldn’t comment on discussions with Brookline about the disposal of the rest of the Education business. Some municipalities are beginning to seek to take back control of assets, and this morning SBB announced the intention to sell SEK3bn of its buildings back to the tenants.