S&P rates Heimstaden Bostad notes BB+

S&P said it assigned Heimstaden Bostad AB’s planned unsecured subordinated hybrid notes of at least benchmark size a BB+ rating. The size of the offering depends on market conditions.

The notes will have a non-call period from issuance between 5.5 years and seven years. After that, the hybrids are callable and are optionally deferrable and subordinated, which accounts for the two-notch deduction from the company’s issuer rating, S&P said.

“The issue rating on the proposed notes is two notches below the BBB long-term rating on Heimstaden Bostad, reflecting our view of the notes’ subordination and interest deferability,” S&P said in a press release.

Heimstaden Bostad plans to use the proceeds for future acquisitions and repay bank debt or short-term bonds.

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