SBB seesaws in morning session on doubts around consolidated coverage ratio
01/06/2023 10:05
** Shares in SBB SBBb.ST are up 3.9% at 09:00 GMT in a
volatile session, with swings in Thursday's share price of
between -9% and +9% spurred by questions marks around the
company's consolidated coverage ratio
** SBB said after market closure on Wednesday that it meets
the consolidated coverage ratio - a measure of a company's
ability to service its debt - as the covenant is calculated in
its outstanding eurobonds
** In an e-mailed note on Wednesday, Danske Bank said that
according to its calculations, the ratio was 1.1x at Q1 23,
before the changed reporting SBB introduced on Monday, which
could suggest a breach of the covenant threshold
** Carlsquare analyst Bertil Nilsson points to both factors
as the reason for today's price instability - SBB stating it
meets the consolidated coverage ratio as well as market analysis
suggesting the landlord does not meet the ratio as per original
definition
** Nilsson also flags that the short selling in SBB is a
"joker in the deck"
** "The impression is that the short selling continues
despite the fact that SBB shares have already reached a record
low," Nilsson says
** The SBB stock, which on Wednesday tumbled 28% seeing its
worst day ever, has the highest short interest among Swedish
stocks, with about 19.15% of the total sold short, according to
data from the country's financial regulator
** The Swedish central bank said on Thursday that risks in
the Swedish financial system have increased, particularly in the
heavily indebted commercial real estate sector to which banks
have a large exposure
(Reporting by Greta Rosen Fondahn)
((Greta.RosenFondahn@thomsonreuters.com))