SBB Forms Second Joint Venture with Castlelake to Address Debt Issues

SBB announced on Saturday that it is forming a joint venture with Castlelake, a U.S.-based private credit firm. This marks the second such partnership in about three months, and the aim is to alleviate the Swedish real estate group’s debt problems.

Details of the Agreement:

Under the new deal, SBB and funds managed by Castlelake have signed a loan agreement worth 5.7 billion Swedish crowns ($534.36 million). The joint venture will utilize these funds to acquire properties from SBB, refinance debt owed to the Swedish firm, and address certain external debts, according to an SBB statement.

Atlas SP Partners will also be part of the lending group. The properties affected in the deal are valued at 9.5 billion Swedish crowns, based on their market value as of March 31, 2024. The portfolio will be operated through a management agreement with SBB, the original owner of the properties.

Previous Joint Venture and Debt Management Efforts:

SBB and Castlelake signed a similar joint venture agreement in February, securing a loan of 5.2 billion Swedish crowns.

In March, SBB announced it was buying back its debt at a 60% discount to its original value. This move was intended to reassure investors as the company works to manage its substantial debt burden.

Outlook on Financing Conditions:

Earlier this month, SBB predicted that financing conditions would improve as it continues to make further write-downs on the value of its properties.