(Bloomberg) -- SBB, the landlord at the center of Sweden’s commercial property crisis, was slammed with a downgrade of five steps further into junk by Fitch Ratings in a fresh blow for its new chief executive’s efforts to stabilize finances. Most Read from BloombergMusk Told Pentagon He Spoke to Putin Directly, New Yorker SaysBorrowers With $39 Billion in Student Loans Finally See ReliefQuant Trader Doubles Fortune to $11 Billion as XTX Profit SurgesS&P Joins Moody’s in Cutting US Banks Amid ‘To
Fitch on Monday slashed the issuer default rating of Samhallsbyggnadsbolaget i Norden AB — as the company is formally known — to B-. That’s one step higher than peer S&P Global Ratings, which last month lowered its credit grade on the company to CCC+ with a negative outlook.
Grappling with an $8 billion debt pile, SBB has become emblematic of how a year of central bank rate hikes have upended real estate in the biggest Nordic economy. Property empires built on cheap credit are teetering after suddenly facing a twin challenge of sliding asset values and higher financing costs.
The landlord, which mainly owns public-sector buildings, lost its investment grade status in early May and has been racing to close a self-identified cash shortfall of 8.1 billion Swedish kronor over the next 12 months.The firm’s downward spiral led to the switch of its chief executive in June. Synnes, who was brought in to replace SBB founder Ilija Batljan, looks to be overhauling the company’s top ranks as he seeks to forge a sustainable business plan.
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