Sveafastigheter “issued” its inaugural bonds in EUR and SEK last summer when bondholders in SBB were offered the possibility to switch issuer. Since then, the company has completed an IPO while bonds have traded up (current spread around 375bps). We like the fundamental credit risk, with a portfolio built up of low-risk residential properties in a regulated rental market while the balance sheet based on property values is lowly leveraged. Weighing negative on our overall assessment is a weak ICR ....
