Creditors say Sweden's SBB breached debt covenant -report

STOCKHOLM (Reuters) - Sweden's SBB received a letter from a group of its creditors last week saying the real estate firm had breached a key financial covenant, which could trigger a default event on its bonds, Bloomberg News reported on Monday.

SBB received the letter, which Bloomberg said it had seen and was sent by international law firm Cleary Gottlieb Steen & Hamilton LLP, on Thursday, the day before SBB's founder and chief executive stepped down, the report added.

Shares in SBB fell 28% on May 31 after another media report, citing Danske Bank credit analysts, said the Swedish company might have breached interest coverage requirements. SBB issued a statement the same day saying it met its consolidated coverage ratio, a measure of a company's ability to service its debt.

The letter said holders of the bonds are open to discussing options for the company to deal with the default and set a deadline of June 30 for the talks, Bloomberg reported.

The Swedish real estate group, which has been hit by soaring interest rates that forced it to cancel its dividend and scrap a share issue, last week said it was broadening a strategic review to consider a sale of all or parts of the company.

SBB said it had no comment on the subject. Cleary Gottlieb Steen & Hamilton was not immediately available for comment when contacted by Reuters.

(Reporting by Marie Mannes; Editing by Susan Fenton, Alexander Smith and Mark Porter)