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CREDIT SUPPLY: Heimstaden Bostad (HEIBOS: BB neg/BB neg): New Perp FV 6.70%

CREDIT SUPPLY
SwedenCredit BulletsBullet
  • IPT: €500 WNG Perp NC5.25 6.875%-7%
  • At 6.875% Sub_Sen is +280 bps
  • FV: 6.70% would put Sub_Sen +263 reluctant to go tighter on this one
  • The recent HEIBOS 3.875% Nov 29 came +175 and is now z+191/188
  • HEIBOS 3% Perp has Sub_Sen +253
  • Weaker names like Bayer (high 230s) and VW (low 230s) clearly trade wide of the norm.
  • But ARNDTN 7.125 Call30 trades close to 8.90% yield to Reset with ms+674 giving Sub_Sen +479 bps... We find it hard to ignore AroundTown
  • HEIBOS has very low ICR @ 1.6x (S&P Method); Net LTV is high 54.8% and has only reduced 0.3% from 2023
  • Fair Value property valuation has stabilised but is not really growing
  • LfL Rental income growth of 6.3% (above 2.1% CPI) is a bright note
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  • IPT: €500 WNG Perp NC5.25 6.875%-7%
  • At 6.875% Sub_Sen is +280 bps
  • FV: 6.70% would put Sub_Sen +263 reluctant to go tighter on this one
  • The recent HEIBOS 3.875% Nov 29 came +175 and is now z+191/188
  • HEIBOS 3% Perp has Sub_Sen +253
  • Weaker names like Bayer (high 230s) and VW (low 230s) clearly trade wide of the norm.
  • But ARNDTN 7.125 Call30 trades close to 8.90% yield to Reset with ms+674 giving Sub_Sen +479 bps... We find it hard to ignore AroundTown
  • HEIBOS has very low ICR @ 1.6x (S&P Method); Net LTV is high 54.8% and has only reduced 0.3% from 2023
  • Fair Value property valuation has stabilised but is not really growing
  • LfL Rental income growth of 6.3% (above 2.1% CPI) is a bright note