SBB Norden - comment
The decision to suspend cash interest on the Hybrids was expected and will save SEK565m a year (€51m). The Hybrids were already trading at 17c/€ so the impact on pricing will be small. The decision reflects the tightness of liquidity. The saved liquidity is nice for SSN holders but doesn’t move the risk needle. The main positive is a recognition that the Hybrids are now an equity instrument. In 2024 SBB needs to execute the sale of a stake in the Residential unit and find investors to refinance its remaining SEK5bn loan to the Education business. Whilst we are sceptical about the possible success of Fir Trees demand for repayment due to covenant breaches, success for the fund could force SBB to seek a stay under Swedish law, setting off a restructuring process.