Swedish landlords’ borrowing costs double in another sign of rising investor anxiety
(Bloomberg) — A long-awaited jump in borrowing costs for the Swedish real estate sector has become a reality for NP3 Fastigheter AB, one of the country’s largest listed real estate companies.
On Friday, the landlord sold a portion of green bonds with a coupon that paid investors 650 basis points above the benchmark rate. That was almost double the coupon on its previous green bond issue, which was sold in May 2021.
Borrowers from the country’s real estate industry, which typically accounts for about half of all corporate bond sales in Sweden, have faced increasing investor anxiety this year amid falling property valuations and aggressive interest rate hikes by central banks.
“In a simplified scenario where property prices fall by 15% across segments, we believe some companies would need to raise additional equity financing to defend their investment grade status,” Danske Bank analyst Louis Landeman said in a comment last month.
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