S&P Global Ratings on July 2 affirmed Kommuninvest i Sverige AB (publ)'s long- and short-term issuer credits at AAA/A-1+, following a criteria review.
The outlook on the ratings of the Swedish municipal funding agency is stable. The agency also affirmed its short-term K-1 Nordic regional scale rating and the senior unsecured debt at AAA. The ratings were also removed from under criteria observation, where they have been since May 22, 2018.
The ratings reflect S&P's view that the bank's management is competent and has remained responsive to shareholder requirements. The bank also responded to financial risks related to expansion of activities and regulatory requirements. The stable outlook reflects the agency's expectation that Kommuninvest's guarantee structure will remain unchanged and the company will continue to receive "unwavering membership support."
The company's management is likely to maintain low risk tolerances and continue to curb risks, S&P said.
The rating agency, however, said it could lower its rating over the next two years if Kommuninvest's poor risk management led to a "notable" deterioration in its liquidity position and in turn put its stand-alone credit profile came under "significant" pressure.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings document referred to in this news brief can be found in the sources section.