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S&P affirms Heimstaden, places RESIDOMO on CreditWatch

S&P Global Ratings affirmed the BBB- rating of Sweden's Heimstaden Bostad AB (publ) following its planned acquisition of Czech residential real estate company RESIDOMO s.r.o.

The outlook is positive.

The rating agency said the acquisition expands Heimstaden's geographic reach, although it noted that the deal will have neutral impact on the buyer's profile since Heimstaden's other markets are more robust. Ratings added that RESIDOMO's higher debt will not affect Heimstaden's credit position.

Separately, Ratings placed the BB- issuer credit rating on RESIDOMO and its secured notes on CreditWatch, which is expected to be resolved upon the completion of the deal or likely within three months.

Ratings said RESIDOMO will likely benefit from Heimstaden's support once the transaction closes. The agency also believes the target company's integration with Heimstaden will improve RESIDOMO's credit risk profile given the buyer's better credit quality.

The Blackstone Group Inc. and Round Hill Capital LLC agreed earlier in January to sell RESIDOMO to Heimstaden for €1.3 billion. According to the rating agency, Blackstone holds 80% of the company, while the remainder is held by Round Hill Capital.

RESIDOMO owns the largest privately held residential portfolio in the Czech Republic, comprising roughly 4,515 assets, with about a third of the properties in Ostrava.

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.