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S&P raises property group SBB out of selective default

FILE PHOTO: The logo of SBB in Stockholm, Sweden

S&P Global raised its long-term issuer credit rating of Swedish real estate group SBB to "CCC" from selective default (SD) on Thursday and maintained its negative outlook, after cutting its rating earlier this week.

The rating agency had cut SBB's rating on Wednesday, following the embattled group's announcement it would buy back debt at a 60% discount to its original value.

The property group had previously said it would pay 162.7 million euros ($175.63 million) to buy back debt worth 407.7 million euros.

"We raised our ratings on SBB's subordinated bonds to 'C' as we believe the company will very likely defer hybrid coupon payments within the next 12 months," S&P said.

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S&P said its negative outlook on SBB's long-term rating reflects the risk of a conventional default or further distressed debt offers within the next 12 months, if the company does not execute its revised business and funding strategy as planned.

Danske Bank credit analyst Marcus Gustavsson had said on Wednesday that the default ratings were usually held for only a short time.

"When the default-event has been signalled to the market, the rating is changed back to again focus on the forward-looking credit quality of a company," he noted.

($1 = 0.9264 euros)

(Reporting by Chandni Shah in Bengaluru; Editing by Alan Barona)