The Swedish economy is facing headwinds from rising interest rates, high inflation and a slump in private consumption and is seen contracting this year, the Organization for Economic Cooperation and Development (OECD) said on Wednesday, Reuters reported. After faring relatively well through the pandemic, soaring consumer price rises and interest rates have begun taking a toll. Swedish households are among the most heavily indebted in Europe while many have floating-rate mortgages, meaning central bank rate hikes quickly result in higher costs.
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Ilija Batljan, the founder and dominant shareholder of embattled Swedish landlord SBB, stepped down as chief executive officer in a dramatic move that highlights the uphill battle he faces to save his $13 billion empire, Bloomberg News reported. Batljan, who founded Samhallsbyggnadsbolaget i Norden AB in 2017, will hand off executive responsibility as of June 5, the Stockholm-based company said Friday in a statement. He will be replaced by Leiv Synnes, who has served as chief financial officer of Akelius Residential Property AB since 2014.
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SAS's rescue has moved a step closer after a U.S. court approved a revised plan from the Scandinavian airline to raise equity, Reuters reported. The long-suffering airline filed for chapter 11 protection last year. The court approval of the fundraising proposal - a key element of the "SAS Forward" rescue plan - means investors may start placing bids for a stake in the airline.
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Sweden’s property crisis worsened after one of the country’s biggest commercial landlords took steps to conserve cash and put its focus on selling assets to plug a funding gap, Bloomberg News reported. SBB postponed a dividend and scrapped plans to sell shares in the wake of a credit rating downgrade to junk. Like many other Swedish property companies, the landlord — formally named Samhallsbyggnadsbolaget i Norden AB — is scrambling to refinance debt, but higher interest rates and investor concerns have closed off many options.
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The funding squeeze gripping Sweden’s leveraged property sector worsened on Monday after one of the country’s biggest commercial landlords saw its credit rating cut to junk with a warning that a further downgrade is possible, Bloomberg News reported. SBB — as Samhallsbyggnadsbolaget i Norden AB is more commonly known — was lowered to BB+ and placed on negative outlook by S&P Global Ratings. The rating firm said it no longer believed the landlord could meet its thresholds for investment-grade debt metrics.
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U.S. asset manager Apollo Global Management Inc. plans to apply for approval from Swedish and Danish regulators to take a majority stake in SAS AB as part of the Scandinavian airline's rescue plan, Reuters reported. The news of interest from the U.S. asset manager sent the embattled carrier's shares up as much as 14% in Wednesday morning trading. At 1011 GMT, they were up 5.9%. SAS has lost almost 60% of its value since it filed for chapter 11 bankruptcy protection last July, seeking to slash costs and debt after wage talks with pilots collapsed. A deal with the U.S.
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SAS will not be using the second tranche of its $700 million debtor-in-possession (DIP) term loan in the second quarter of the year, due to stronger than expected development of the airline's liquidity, the airline said on Monday, Reuters reported. SAS may, depending on the development of its liquidity, continue discussions with Apollo regarding access to the second tranche of the DIP term loan at a later stage of the chapter 11 process.
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Scandinavian airline SAS AB said on Thursday it had initiated steps to raise equity and would seek bids as part of its ongoing chapter 11 bankruptcy proceedings in the U.S., Reuters reported. The embattled carrier filed for bankruptcy protection in the U.S. last year as it sought to slash costs and debt amid strikes from pilots after wage talks collapsed. The airline, which earlier aimed to raise SEK 9.5 billion ($911.20 million) in equity financing, now said the final sum would be dependent on the bidding process and generation of additional liquidity by the airline.
The Swedish central bank might have underestimated inflationary pressure and will likely have to stick to its forecasts of another interest rate hike in April, Riksbank Governor Erik Thedeen said on Sunday, Reuters reported. The central bank has raised rates to 3% from 0% a year ago and has yet to curb 9.4% inflation, well above the 2% target. It hiked the benchmark rate by 50 basis points in February and has indicated another hike by 25 or 50 basis points in April. "It could be that the inflation process is worse than we thought," Erik Thedeen told SVT television.
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Sweden's central bank still expects to hike rates by a quarter or half percentage point in April, but market turbulence in the United States means incoming data will be decisive for policy, Riksbank Governor Erik Thedeen said on Tuesday, Reuters reported. The sudden collapse of Silicon Valley Bank and Signature Bank pressured global bank stocks further on Tuesday, following sharp losses on Monday, as investors fretted over the financial health of some lenders, despite assurances from U.S. President Joe Biden and other policymakers.
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