Samhaellsbyggnadsbolaget i Norden (SBB), a prominent Swedish property company, has recently received a debt repayment demand from one of its creditors. The creditor alleges that SBB has violated the terms of a bond agreement.
Heavy Borrowing for Public Property Portfolio
SBB financed its extensive portfolio of public property, consisting of social housing, healthcare facilities, schools, and government buildings, through substantial borrowing. However, the company has been adversely affected by the sharp rise in interest rates. As a result, SBB has been compelled to sell and spin out portions of its portfolio in order to generate much-needed cash.
Breach of Covenant Ratio: Disputed Claim
In a statement released on Thursday, SBB stated that one of its bondholders has asserted a breach of a covenant ratio. This ratio serves as a measure of a company's ability to meet its debt obligations. Consequently, the bondholder is now demanding the repayment of bonds with a nominal value of 46 million euros ($49.1 million).
However, SBB vehemently denies the claim and firmly rejects its validity.
Protective Measures and Transformation Plans
To safeguard its interests and those of its stakeholders, SBB affirms that it will take all necessary actions. The company has already enlisted the assistance of experienced legal and financial advisors. SBB emphasizes the importance of continuing its ongoing transformation and strengthening its financial position without being hindered by baseless claims.
Minor Proportion of Bond Loans Affected
The disputed holdings represent around 1% of SBB's total bond loans as of June 30. Specifically, these bonds are scheduled to mature in 2028 and 2029.