Sweden's SBB exchanges $2.9 bln debt, eyes lower leverage ahead

Samhallsbyggnadsbolaget I Norden AB

18/12/2024 09:53

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      Says most bondholders accept debt exchange offer
    

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      New bonds have clearer clauses, facilitating turnaround
    

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      CEO expects more property deals, lower debt
    

  
       OSLO, Dec 18 (Reuters) - Swedish real estate group SBB
 SBBb.ST  will have greater flexibility to divest property and
to reduce its overall debt after completing a bond exchange
offer on Wednesday, the company's CEO told Reuters.
    The group said bondholders had agreed to an exchange of debt
valued at 2.78 billion euros ($2.92 billion) in return for new
securities, part of an effort to overcome objections from some
creditors to its restructuring.
    Built on a public property buying spree that included social
housing, government offices, schools and hospitals, SBB stood at
the centre of a Swedish property market bubble that unravelled
from 2022 to 2023 when inflation and interest rates soared.
    SBB had set a minimum requirement of 1.7 billion euros for
going ahead with the debt exchange transaction, which the
company said set clearer bond clauses, also known as covenants,
helping facilitate the group's turnaround.
    "Most of the bondholders were friendly and have worked with
us," SBB CEO Leiv Synnes said, adding that 95% of the relevant
creditors accepted the exchange offer.
    SBB has spun off several property units as independent
companies this year, and plans further restructuring.
    "We have proven that we can do property transactions in a
good manner and have a dialogue with creditors," Synnes said.
    "We understand that we need to lower our leverage, and we
will do that," he added.
    SBB's share price was up 18% at 0920 GMT to 4.15 Swedish
crowns on the Stockholm bourse. It is still down more than 90%
from its 2022 peak.    
    ($1 = 0.9518 euros)

 (Reporting by Terje Solsvik
Editing by Mark Potter)
 ((terje.solsvik@thomsonreuters.com; +47 918 666 70;))