Finance
Sweden’s SBB exchanges $2.9 billion debt, eyes lower leverage ahead
Global Banking & Finance Review®
Company
OSLO (Reuters) – Swedish real estate group SBB 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.
OSLO (Reuters) – Swedish real estate group SBB 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)
Debt financing is the process of raising capital through the issuance of bonds or borrowing from financial institutions, which must be repaid over time with interest.
Corporate bonds are debt securities issued by companies to raise funds for various purposes, including expansion and operational costs, with a promise to pay back the principal along with interest.
Financial restructuring involves reorganizing a company's financial obligations to improve its financial stability, often through debt exchange, refinancing, or renegotiation of terms.
Real estate investment involves purchasing, owning, managing, renting, or selling properties for profit, often considered a stable investment option.
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