SBB - comment

The company is unlikely to be overly concerned about the possibility of S&P giving it a Selective Default rating due to the distressed tender. The new divisional structure at SBB will create three entities that are rated independently of SBB (with IG ratings being targeted). We doubt SBB will be an issuing vehicle again. SBB Norden bondholders will face layering, but this needs to be balanced by the access to higher levels of senior debt and the sale of equity stakes used to repay debt at the SBB Norden level.