S&P cuts Akelius on special dividend

S&P said it downgraded Akelius Residential Property AB’s long-term issuer and senior unsecured ratings to BBB- from BBB, citing its proposed exceptional dividend of €1.3 billion (related to class A ordinary shares) by moving most of its available financial assets to its main shareholder, Akelius Apartments Ltd. The agency also lowered the rating on Akelius’ €500 million of subordinated notes to BB from BB+.

Akelius Apartments will provide a financial guarantee for up to €1.1 billion to refinance some of the company's upcoming debt maturities, the agency said.

“We view this unexpected distribution as reducing the company's liquidity buffer and financial policy prudence, while also pushing its debt-to-EBITDA ratio to well above 13x,” S&P said in a press release.

The outlook remains stable.

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