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Danske Bank Switch Idea: Castellum SEK 29s to Castellum EUR 29s

REAL ESTATE


  • Castellum this month issued a SEK 1bn Sr Unsecured 2029 though their EUR 29 bond offers ~40bps in pick-up (or 80bps per annum given EUR bond is ~8 months longer).
  • EUR 29s are considered attractive compared to peers, making it also attractive on an outright basis in their view.
  • Confidence in Castellum supported by its commitment to maintaining an investment-grade rating and the backing of main owner Akelius.
  • Risks include potential rating action on their Baa3 rating though they were affirmed in December where Moody’s lowered the ICR downgrade threshold to 2.75x from 3x and the unencumbered assets threshold to 40% from 45%.
  • Other risks include the possibility of rate increases and the impact of weakening macro on CRE vacancies.

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