(Bloomberg) -- One of Sweden’s largest landlords plans to buy back some of its junior notes to further reduce debt, a sign that the bond market is still too expensive for some issuers struggling with soaring rates. 

Fastighets AB Balder aims to buy back as much as €44.4 million ($47.2 million), it said in a statement on Monday. The money used to repay the so-called hybrid bonds will come from bank financing, Chief Financial Officer Ewa Wassberg, said in a interview, outlining more details. 

“We’re continuously taking up bank financing and replacing bonds by repaying them before maturity” she said by phone. The firm “has been clear that we will continue to shift from bonds to bank.” 

The property firm, which like many of its sector colleagues has been racing to shore up finances amid a interest rate-driven funding squeeze, cut bond financing by about 10 billion kronor ($900 million) in the second quarter through buy-backs. Chief Executive Officer Erik Selin said in July that his firm has adapted to not needing any bond funding for “many years.” 

Some property firms has wowed to sell assets to shore up their finances. But while Balder is open to that possibility, it hasn’t made any larger disposals yet, Wassberg said. “Our plan is to fund ourselves via banks, if we’re selling any properties it’s just a bonus,” she said. 

Balder was downgraded to junk status by Moody’s Investor Service in February, which later choose to withdraw its unsolicited rating due to too little information about the firm. It has a BBB rating with negative outlook from S&P Global Ratings. 

“It’s obviously important to have diversified sources of financing, but I can’t say now what we aim to do in the future,” Wassberg replied when asked if the firm would consider to issue new hybrid debt. 

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