Post by account_disabled on Mar 10, 2024 5:26:17 GMT -5
Rate increases continue to plague the majority of homeowners, and Sweden was no different. The Nordic country seems to be coming out of its lethargy after almost a year and a half in which the large real estate companies have been very paralyzed. Thus, they begin to issue bonds in what seems to have become a sign of recovery.
In the last week, Swedish issuers such as Castellum AB, Fabege AB and Dios Fastighter AB have announced new bond issues that, together, would amount to 2.4 billion Swedish crowns (about 201 million euros). This decision is seen as an intentional assessment of the current situation caused by the evolution of the bond market, something confirmed by the head of bonds at Svenska Handelsbanken AB, Anders Holmlund.
Bond volume down 88% in 2023
However, investor demand for bonds seems Cambodia Telegram Number Data changing at the moment, something that does not allow us to know if the country has entered a long-term upward trend. Despite this, Holmlund does seem to agree with other bankers in the change in trend. For his part, the head of the IG Organization and ESG DCM union, Gustav Bjorck, has considered that the change is due to a general positive sentiment, especially because the end of the rate increases is getting closer and closer.
It should be noted that the volume of bonds has decreased by around 88% so far this year compared to data from the same period in 2021, making it difficult to ensure that the sector has come out of its worst moment. In this way, current levels are still far from meeting the financing deficit, which reaches 27 billion dollars.
In this sense, Swedish lessors must find a way to refinance this amount until 2025. To achieve this, given that bond costs remain too high, entities are divided between selling assets or issuing shares. This has been the case of the Swedish Corem Property Group AB, which sold assets for nearly 10 billion Swedish crowns (839 million euros) in the first half to cover its liquidity problems.
In addition, the company intends to continue reducing its bond volume if current conditions do not improve, after repaying one worth 850 million Swedish crowns (71.3 million euros) at the beginning of the week.
The rate hike is unsustainable for many businesses
The underlying rates were at 0% at the beginning of 2022 , from which point they began to rise until reaching the current 4% , which causes an unaffordable cost of loans for many business models. At a time when interest rates were ultra-low, many companies, including Corem , took advantage to increase their portfolio.
However, the moment rates suddenly began to rise, they found themselves with unsustainable leverage . Thus, the positive signs from the real estate sector seem to be going in the right direction for the CEO of Corem , who recalled that it remains to be seen whether the improvement is here to stay.
In the last week, Swedish issuers such as Castellum AB, Fabege AB and Dios Fastighter AB have announced new bond issues that, together, would amount to 2.4 billion Swedish crowns (about 201 million euros). This decision is seen as an intentional assessment of the current situation caused by the evolution of the bond market, something confirmed by the head of bonds at Svenska Handelsbanken AB, Anders Holmlund.
Bond volume down 88% in 2023
However, investor demand for bonds seems Cambodia Telegram Number Data changing at the moment, something that does not allow us to know if the country has entered a long-term upward trend. Despite this, Holmlund does seem to agree with other bankers in the change in trend. For his part, the head of the IG Organization and ESG DCM union, Gustav Bjorck, has considered that the change is due to a general positive sentiment, especially because the end of the rate increases is getting closer and closer.
It should be noted that the volume of bonds has decreased by around 88% so far this year compared to data from the same period in 2021, making it difficult to ensure that the sector has come out of its worst moment. In this way, current levels are still far from meeting the financing deficit, which reaches 27 billion dollars.
In this sense, Swedish lessors must find a way to refinance this amount until 2025. To achieve this, given that bond costs remain too high, entities are divided between selling assets or issuing shares. This has been the case of the Swedish Corem Property Group AB, which sold assets for nearly 10 billion Swedish crowns (839 million euros) in the first half to cover its liquidity problems.
In addition, the company intends to continue reducing its bond volume if current conditions do not improve, after repaying one worth 850 million Swedish crowns (71.3 million euros) at the beginning of the week.
The rate hike is unsustainable for many businesses
The underlying rates were at 0% at the beginning of 2022 , from which point they began to rise until reaching the current 4% , which causes an unaffordable cost of loans for many business models. At a time when interest rates were ultra-low, many companies, including Corem , took advantage to increase their portfolio.
However, the moment rates suddenly began to rise, they found themselves with unsustainable leverage . Thus, the positive signs from the real estate sector seem to be going in the right direction for the CEO of Corem , who recalled that it remains to be seen whether the improvement is here to stay.