Fastpartner seeks to reassure investors after cut to credit rating (updated)

FastPartner AB

19/06/2023 10:35

(Recasts, adds share price reaction, analyst comment and
context)
       STOCKHOLM, June 19 (Reuters) - Swedish commercial
property company Fastpartner  FPARa.ST  has sought to reassure
investors of its financial stability after Moody's had cut its
credit rating to junk status.
    Fastpartner has enough cash to handle debt maturities for
more than 30 months, it said after Moody's had cut its credit
rating late on Friday. 
    High debt, rising interest rates and a wilting economy has
proved a toxic cocktail for Sweden's commercial property
companies, with some cut to junk by ratings agencies. Commercial
landlord SBB  SBBb.ST  is at the centre of the spiral. 
    Concern over the sector is weighing on the nation's currency
while investors are wondering if Sweden will be the first domino
to fall among beleaguered property sectors across Europe.
    "More companies with downgraded credit ratings increase the
perception of Swedish real estate companies as highly
leveraged," said Carlsquare analyst Bertil Nilsson.        
    Moody's had said late on Friday that it would lower its
rating on Fastpartner, which owns mainly commercial property, to
Ba1 from investment grade Baa3.
    Shares in the company were down 9.3% at 40.65 Swedish crowns
by 0836 GMT on Monday. 
   Fastpartner said in a separate statement that it had recently
strengthened its financial stability by extending the terms of
existing bank loans and rapid credit facility agreements. 
    "The implication of these measures is that we have liquidity
to handle all debt maturities for a period exceeding 30 months,"
said CEO and majority owner Sven-Olof Johansson. 
    "In light of this and the company's relatively low share of
outstanding bond loans, the lowered credit rating has marginal
significance for the company's day-to-day operations." 
    Johansson is the fourth-largest shareholder in crisis-hit
SBB and also sits on its board.
    There is a large amount of cross-ownership among various
real estate companies and private individuals, which has been
raised as a concern by Swedish authorities. 
    Sweden and Germany are among the worst affected by a
widening property slump on the continent, according to European
Union data provider Eurostat.


 (Reporting by Anna Ringstrom and Marie Mannes in Stockholm
Additional reporting by Jesus Calero in Gdansk
Editing by Louise Heavens and David Goodman
)
 ((anna.ringstrom@thomsonreuters.com; +46 8 502 423 74; Reuters
Messaging: anna.ringstrom.thomsonreuters.com@reuters.net))