SBB Norden - comment
SBB needs Sveafastigheter’s equity to continue to rally if it is to reduce its own leverage, and the successful placing of €300m of 2031 SUNs at 4.5% will help convince the equity market of the value of this business. The new SUNs will carry a coupon in line with the yield on the residential portfolio. Part of the proceeds will be used to redeem the €183.5m of 4.75% 01/2027 SUNs, preventing them from becoming current. At present, SBB still consolidates Sveafastigheter. Our valuation of SBB is the sum of its participations in the three separate divisions.