Balder is one of the largest real estate companies in the Nordics. The outlook on all ratings has been changed to stable from ratings under review.

Moody's has withdrawn Balder's long term issuer rating of Baa3 following its downgrade to Ba1, as per the rating agency's practice for corporates with non-investment-grade ratings.

Moody's downgrade of Balder's ratings reflects Moody's expectation of continued pressure on Balder's key credit metrics, in particular on the group's fixed charge cover and loan to value leverage. Continued high inflation and central banks response by rising rates is increasing the cost of funding for Balder, considering that the group has a material portion of its debt on floating rate terms. 

"We hence forecast the group's EBITDA/interest coverage (as defined by Moody's) to reduce to below 3x from approximately 3.5 x (based on external interest expense) in December 2022 over the coming quarters. Balder's stand-alone effective leverage at 53.2% (consolidated including Sato at 51.1%) as of Q4 2022 is high at this point in the cycle compared to the levels expected for its previous Baa3 rating and also when compared to peers leaving little room to withstand market value declines of its property portfolio. We do not expect Balder at this point to carry out any meaningful deleveraging actions, such as large-scale disposals or significant equity raises," Moody's states in its press release.