Heimstaden Bostad - comment

Only three questions on the Heimstaden Bostad call this morning, reflecting how the market has moved on. No longer on the stressed list, Heimstaden Bostad’s Q4 numbers continue its trajectory back to BBB territory.  Heimstaden achieved a 0.7% increase in property valuations in the quarter, coupled with further privatisation sales, at 24% premium to book value, resulting in LTV declining further to 53.8%.  Operationally the Company continues to improve, but Heimstaden Bostad’s historic issues were balance sheet focused.  With Asset Backed funding tightening further in the market, the Company are now able to guide for ICR to remain in the 1.5-1.6x range. The target will be to improve this further, which will return the Company to BBB from its current BBB- rating. This will enable the Company to recommence dividends.