Swedish landlord SBB’s offer to buy back some of its bonds at steep discounts may be tantamount to a default, according to a statement from S&P Global Ratings.

The ratings agency placed Samhallsbyggnadsbolaget i Norden AB, as it is otherwise known, on watch for a possible downgrade to selective default in a statement Friday. S&P said it would be able to assess further once the final results of the buyback were published.

SBB has been at the center of a property crisis in Sweden where many corporate borrowers are struggling to refinance billions of dollars of debt amassed in the cheap-money era. Faced with the twin threats of surging borrowing costs and falling property valuations, companies such as SBB have resorted to asset sales and equity injections to shore up their balance sheets.

Having a struck a recent cash deal with Canada’s Brookfield Asset Management to sell a portfolio of schools, SBB is now trying to take advantage of its bonds trading below par to buy back its notes, in order to cut debt costs and avoid an expensive refinancing. However, ratings firms can consider such transactions distressed if they determine that creditors are getting far less than originally promised.

“We will consider whether the transactions would involve investors receiving less than the original promise, and whether there is a realistic possibility of a conventional default on the instruments,” the S&P statement said.

SBB offered to repurchase up to €600 million of bonds on Thursday in a tender offer which envisaged prices as low as 15 cents on the euro for some of company’s hybrid securities.

The company has come under pressure from creditors in recent months, as liquidity has dwindled. Last week, one of the firm’s bondholders, US hedge fund Fir Tree Partners, sent a letter to SBB claiming it was in breach of a key debt term and demanding its money back.

--With assistance from Charles Daly.

(Updates throughout)