(Bloomberg) -- Finland’s Sato Oyj, whose main owner is Swedish landlord Fastighets AB Balder, was cut to junk at Moody’s Investors Service as Sweden’s real estate crisis reverberates across the Nordic region.

The owner of 25,000 Finnish apartments joins a growing list of so-called fallen angels that have seen their ratings leave the investment grade bracket and enter high yield. In Sweden, where the property market suffers the most, the rating cuts are exacerbating a financing crunch that is seen as a warning for Europe’s real estate industry.

Moody’s cut Sato to Ba1 from Baa3, which is the lowest investment grade, according to a statement late Thursday. Moody’s cited an expected deterioration in Sato’s interest coverage ratio, financing challenges and the “weakening position” of Balder, which will reduce the likelihood of financial support from the owner. Balder has a 56.3% stake, according to Sato’s website.

The cut was “harsh,” but not a big surprise because Sato published weak first-quarter results soon after Moody’s had placed its ratings on review for a downgrade back in March, Olli Eloranta, a credit analyst at Danske Bank, said in a note.

“We think that the downgrade exhibits Moody’s more aggressive approach towards unsolicited ratings as Sato’s key credit metrics were not yet in breach with the agency’s requirements,” the analyst said.

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