The financially strained real estate company SBB has had its credit rating downgraded to SD (partially suspended payments) by the rating institute S&P Global. The stock fell on the Stockholm Stock Exchange following the news and closed at minus 4.0 percent on Wednesday.
S&P Global assesses that SBB will not be able to manage its debt mountain and will in practice suspend payments within six to twelve months.
After the stock exchange closed, SBB announced that the company is deferring interest payments on hybrid bonds.
"The measure is being taken to strengthen liquidity," the company writes in a press release, stating that the deferred interest will be paid in accordance with the bonds' terms.
A hybrid bond is subordinated to other debts and is considered a hybrid between borrowed and equity capital.
S&P Global writes in a comment on the downgraded credit rating that the institute views the terms offered by SBB to its lenders as equivalent to suspended payments "since the lenders will receive less than what they were originally promised".
