Pareto High Yield Daily-07/01/2026

Research evidence excerpt

Pareto High Yield Daily-07/01/2026

uarter, with ICR (S&P EUR/NOK 11,34 0,0 % 0,5 % -0,5 % -0,5 %

method) now at 1.7x. SEK/NOK 1,02 0,0 % 0,0 % -0,1 % 0,0 % Oil price, Brent

• There is a liquidity runway in Heimstaden AB to Q1 2028, and we are confident

that dividends from Bostad to AB will be reinstated ahead of that. The key USD/bbl

trigger for reinstating dividends is a clear path to a BBB flat rating in 140

Heimstaden Bostad. 120

• Capital markets pricing across the rest of the Heimstaden structure has 100

normalised toward pre-COVID levels, with senior unsecured bonds in 80

Heimstaden AB trading at ~400 bps. 60

• The hybrids in Heimstaden AB are also trading above par, but there is accrued

interest of 24%/18% on the SEK/EUR hybrids after ~2.5 years of no cash

coupons. 20

• Hybrid holders have solid value backing with an LTV of 36.5% (incl. accrued -

interest). Jan-21 Sep-21 May-22 Jan-23 Sep-23 May-24 Jan-25 Sep-25 May-26

• At prices of 107%/106% on the SEK/EUR hybrids, the yield to refinancing in iTraxx crossover

Q1’28 is 19%/16%. An upside scenario is a refinancing at the EUR hybrid bps

step-up date in Q1’27, providing annualised IRR of 43%/30% (~21%/15% over 750

the 6-month holding period). 650

• In sum, we see highly attractive risk-reward in the hybrids in Heimstaden AB.

• Link to credit update, link to supporting slides 550

Jan-21 Sep-21 May-22 Jan-23 Sep-23 May-24 Jan-25 Sep-25 May-26

Analysts:

Daniel Rosén

+46 70 935 07 69, daniel.duerosen@paretosec.com

Adam André

+46 79 006 75 35, adam.andre@paretosec.com

Borge Skurtveit

, borge.skurtveit@paretosec.com

For disclosures on relevant definitions, methods, risks, potential conflicts of interests etc. and disclaimers please see www.paretosec.com. Investment Recommendations should be reviewed in