FINANCING

Balder's financing strategy and the risk profile sought by the Board of Directors are reflected in a balance sheet that meets the criteria for an investment grade rating and a well-diversified capital supply.

The company has long been successful in building a real estate business with a size and diversification that are very suitable for both bond financing and secured bank loans. Having a balance sheet that satisfies the criteria for an investment grade rating and continuous access to bond financing is not simply a matter of financing strategy, it is also very much in line with the risk profile that the Board of Directors is in general striving to achieve for the company. One example of this is the decision by Balder’s Board of Directors to introduce an additional financial goal regarding Net debt/EBITDA ahead of 2023. The key ratio shall be no more than 11.0 times over a period of time.

Balder has assets in several markets, and to reduce the risks and ensure financing that is sustainable in the long term, the company has a well-diversified financing structure with bonds and bank financing in several different currencies. We value long-term relationships with our credit providers consisting of major Nordic banks and investors in the capital market.

Several financing sources

The single largest financing source is euro bonds issued in the European bond market, under Balder’s EMTN programme, followed by bank loans in various currencies, a domestic MTN programme, as well as a commercial paper programme in euros and Swedish kronor. Aside from these financing sources, Balder has also issued hybrid capital with a maturity of 60 years and that it is treated as equity by credit rating agencies when calculating key ratios.

Balder has a green bond framework aiming to finance projects in line with the company’s sustainability policy and contributing to reduced environmental impact. The framework was updated in 2023 and aligns with the company's goal on increasing the share of green financing.

Investment grade rating

The company has long been successful in building a real estate business with a size and diversification that are very suitable for both bond financing and secured bank loans. Having a balance sheet that satisfies the criteria for an investment grade rating and continuous access to bond financing is not simply a matter of financing strategy, it is also very much in line with the risk profile that the Board of Directors is in general striving to achieve for the company.

Balder has an investment grade rating from Standard & Poor's (S&P) of BBB.

Financial targets

• Net debt to total assets shall not exceed 50 percent.
• Interest coverage ratio shall be at least 2 times.
• Equity/assets ratio shall be at least 40 percent.
• The key ratio (net debt/EBITDA) shall not exceed 11 times over a period of time.