Catella sees easing of credit terms in Sweden

The Swedish real estate lending environment is easing and credit is becoming more readily available, according to a new report by property adviser Catella.

The December issue of Catella’s Real Estate Debt Indicator (CREDI) indicates that loan margins on property financing in the Nordics have contracted over the past three months. This represents a marked improvement on sentiment in September, when respondents on average expected financing terms to worsen slightly in the coming three months.

Since September, Catella has observed several signs of an improving credit market. The funding costs for the major Swedish property lenders have continued to contract, as indicated by falling CDS spreads. In recent transactions and current negotiations, the credit terms offered have improved slightly, and loan ticket sizes have increased in prime transactions.

'We believe that the CREDI results, alongside current market sentiment, indicate that the listed sector will see an improvement in terms and availability of loan financing in 2013. This implies increasing activity on the transaction market.' said Daniel Anderbring, research analyst at Catella.

CREDI consists of two parts: a quarterly current and forward-looking survey of Swedish listed property companies and banks providing real estate financing for the Nordic market; and a set of indices based on publicly available data illustrating the aggregate change in credit conditions such as leverage, duration and cost of debt for the Swedish listed property sector.