(Bloomberg) -- SBB, the company at the center of Sweden’s property crisis, has seen its credit rating cut four further steps to CCC+ by S&P Global Ratings, piling even more pressure on the landlord to close a funding gap.

Samhallsbyggnadsbolaget i Norden AB — as it’s formally known — “faces significant short-term debt maturities, which weigh on the company’s liquidity position,” according to a statement by the rating firm on Friday.

The triple-C rating is only five notches above default and means SBB’s debt is now viewed as “vulnerable to non-payment.” The negative outlook by S&P signals further downgrades could be on the way unless the landlord plugs a self-identified cash shortfall of about $769 million over the next 12 months. 

“Today’s action is a clear demonstration that the rating agencies will not have the patience to await the outcome of SBB’s currently ongoing negotiations,” Danske Bank credit analyst Louis Landeman said in a note to clients.

SBB shares fell as much as 7.5% in Stockholm following the downgrade. Its senior unsecured bonds due in 2025 dropped 1.5 cents on the euro to 78.64 bid, according to data compiled by Bloomberg.

“The negative outlook reflects high uncertainty regarding SBB’s ability to successfully secure sufficient funding to cover its short-term debt maturities within the next few months,” S&P said.

But narrowing the gap continues to prove a difficult balancing act for SBB. 

Last week saw Brookfield Asset Management Ltd walk away from a potential deal to acquire a 51% stake in a portfolio of school buildings. The company also angered a group of bondholders including BlackRock Inc after announcing a planned sale of preference shares. The creditors subsequently threatened legal action if various demands weren’t met by the end of this week.

SBB has been on the back foot ever since its investment-grade credit rating — a vital funding tool that helped it amass $8 billion of debt in the cheap-money era — was cut to junk in early May. The downgrade sparked a panic among investors and led to the ousting of its founder and then chief executive, Ilija Batljan. The embattled company has since put itself up for sale.

Batljan’s successor at the helm of the company suggested in emailed comments to Bloomberg that the rating firm doesn’t yet have the full picture.

“Due to the ongoing multiple parallel processes, complex negotiations, and macroeconomic uncertainties, it is not in the company’s interest to be as detailed about the timing and financial details as S&P would like at this stage,” Chief Executive Officer Leiv Synnes said.

What Bloomberg Intelligence Says:

“With negative pressure persisting on SBB’s ratings assigned by Fitch and Scope, more downgrades may follow today’s S&P cut. In the absence of further detail, comments from SBB’s CEO regarding creditor talks and other negotiations may not allay market concerns.”

—Tolu M Alamutu, BI senior credit analyst (read more here)

--With assistance from Christopher Jungstedt and Giulia Morpurgo.

(Adds chart, bond prices, analyst comment.)

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