SBB Norden - comment

The SBB results were better than we expected operationally, with LFL rental growth of 5.5%, but the balance sheet is still overleveraged, and the holding company is a long way from being able to return to the bond market; the banks are more supportive now that the Fir Tree litigation has been withdrawn. SBB calculated senior secured LTV is 20%, with 61% total LTV. We are going to update our model over the next few days. The company is still on its feet, as the successful tender/exchange offers removed the interest cover covenant risk and killed the Fir Tree EMTN acceleration case. At year-end, cash was SEK2.5bn (SEK0.3bn at the Residential business.). SBB also had SEK2.5bn of credit facilities (including SEK1bn at the Residential business). SBB has minimal maturities in both bank and bonds, with the next pinch point being a SEK5.7bn maturity in August 2026. We had expected the SEK5bn loan to Nordquis (book value SEK4bn) to be refinanced to provide further liquidity, but management says it may remain in place until maturity in 2029. There were only minimal asset write-downs in Q4, and management said they expect stability or a minor tailwind in 2025.