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Investing.com -- Fitch Ratings has upgraded Norwegian community service Public Property Invest ASA’s (PPI) Long-Term Issuer Default Rating to ’BBB+’ from ’BBB’ with a Stable outlook.
The upgrade follows PPI’s plans to acquire a SEK37 billion community service portfolio from Samhällsbyggnadsbolaget i Norden AB (SBB). This acquisition will transform PPI into a pan-Nordic property company and increase its exposure to elderly care, LSS housing, and government-linked tenants.
The deal will be funded through NOK13.8 billion of new equity issued to SBB, Aker ASA, and other PPI shareholders, along with a NOK13.5 billion unsecured bridge-to-bond facility and cash resources.
The combined NOK53 billion portfolio will span Sweden (53%), Norway (29%), Finland (18%), and Denmark (2%), significantly expanding from PPI’s previous Norway-focused operations. Annual rental income will increase to NOK3.7 billion from PPI’s current NOK1 billion.
The acquisition price of NOK34 billion represents an 8% discount to the portfolio’s book value at the end of the third quarter of 2025. The transaction remains subject to EGM approval.
Fitch forecasts PPI’s net debt/EBITDA to increase to around 9x in 2026 before improving due to rental growth, while EBITDA net interest cover is expected to improve to 2.3x by end-2026 from 1.9x in 2024.
PPI has maintained its commitment to keeping leverage below 9x and loan-to-value below 50%. The company has actively managed its portfolio, extending lease length to 7.5 years WAULT while improving occupancy to 98%.
In May 2025, PPI acquired a NOK1.5 billion portfolio of eight industrial properties in Norway, attracting Aker ASA as a strategic shareholder through its subsidiary APG Invest AS, which provided NOK2.3 billion in equity.
The rating upgrade also reflects PPI’s improved financial profile and access to capital through new unsecured bonds, creating a largely unsecured balance sheet with an average debt maturity of around five years.
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