Now the Ball is in the Hands of the Credit Rating Agencies

Outlooks

The capital increase and the purchase of the shares by the Federal Government of the Federal Republic of Germany stabilize the company and make it appear less likely that it will run into difficulties. The credit rating agencies must therefore check whether the outlook must remain negative or whether it can even be turned positive. The company’s crisis was caused by political decisions – and can also be averted by political decisions.

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Arguments for a More Stable Outlook

Compliances, Outlooks

GRENKE AG, a global financing partner for small and medium-sized enterprises, generated net profit of EUR 20.5 million in the first quarter of 2022 (Q1 2021: EUR 14.0 million), corresponding to an increase of 46.8% compared to the first quarter of 2021. However, it is questionable whether this and the company’s results presented below are sufficient to change the negative outlook, which was determined by both rating agencies, to a stable outlook or even a positive outlook.

Standard & Poor’s BBB+ / A-2 negative, December 2021

GBB Rating A- / – negative July 2021

The compliance history, which had led to great uncertainty, still weighs heavily on the company. In particular, the confidence of the minority shareholders must be secured.

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Clear Rating Target Defined

Outlooks

Samhällsbyggnadsbolaget i Norden AB (publ) (“SBB”) has entered into a binding agreement to divest eight non-strategic properties with commercial tenants for approximately SEK 400m. This exceeds the latest external valuations (as of 30 September 2021) by 60 percent.

“We are selling the properties considerably above our most recent quarterly valuation and will use the proceeds to further strengthen our balance sheet with the aim of achieving a BBB+ rating,” says Oscar Lekander, Head of Business Development, Samhällsbyggnadsbolaget i Norden AB.

The company currently reports on its ratings as follows:

S&P Global Ratings

Long-term RatingDateOutlook
BBB-March 1, 2021Positive
Short-term RatingDateOutlook
A-3 November 30, 2020

Fitch Ratings

Long-term RatingDateOutlook
BBB-November 25, 2020Positive
Short-term RatingDateOutlook
F3November 25, 2020