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Weekly Credit Update
19 January 2016
Analysts
Thomas Hovard
+45 45 12 85 05
hova@danskebank.com
Katrine Jensen
+45 45 12 80 56
katri@danskebank.com
Investment Research
www.danskebank.com/CI
Important disclosures and certifications are contained from page 37 of this report
Contents
- General credit market news and current themes
- Scandi High Yield
- Scandi Investment Grade
- Credit indicators
- Coverage universe, credit ratings and recommendations
2
What's on our minds
- General credit market news
• The trend from the first week of the year was repeated last week
with very low risk appetite. Indeed, the sell-off makes it one of the
weakest starts ever. The most significant message from
investors is that they remain sidelined waiting for primary
issuance and repricing of secondary markets. Stocks are
generally hit harder than credits but still iTraxx Main widened
11bp last week to approximately 96bp and iTraxx Crossover
widened around 30bp to 384bp.
• Further, they have relatively high liquidity despite initiations of
fund outflows, as the sell-off began late in 2015.
• Corporate issuance has been relatively modest and we expect a
pickup in activity before entering black-out periods. This said, AB
InBev did a record USD46bn deal (in several tranches) funding
the takeover of SABMiller, which is the second-highest issue
ever. Our overall expectation for spreads in 2016 remains for a
(relatively modest) widening. See Credit Outlook 2016: ECB still
on the throttle but the road ahead looks bumpy , 11 January.
• Norway continues to be the big uncertainty amid the oil price
collapse. We have already seen restructuring cases in the
Norwegian oil-related markets (and much more to come) and we
remain bearish on these markets and banking, which is typically
late cycle. Thus, we expect a significant pickup in provisioning
levels in companies’ Q4 reports (spurred by the Norwegian FSA
on the back of surprisingly low levels currently) and to be
continued in 2016.
Source: Bloomberg, Danske Bank Markets (both charts)
3
Scandi high yield
4
Sell DONG Energy call 2023 (EUR) – stay exposed to the short end
Published on 18 January 2016
Key arguments for the trade
•
Spread on the DONGAS call 2023 hybrid not adequate.
The bond trades ‘only’ slightly wider than the ‘BBB-’ fair
value curve (see below) and is rated ‘BB+’ by S&P.
•
Several longer term risks. We see a broad range of
longer term challenges for DONG Energy, which are not
reflected in the longer end of the curve.
•
The call 2023 has call event risk. Being a high-coupon
hybrid, the cash price is somewhat above 101, making
the hybrid exposed to event risks allowing an issuer call
(due to i.e. rating methodology or accounting change).
Relative value (EUR), indicative mid spreads
•
Longer term risks revolve around longer term shareholder friendliness after IPO, PSO (feed-in tariff) run-off
on old wind parks, uncertainty about future of PSO, weak
oil price (hedged only in 2016) and weak power prices.
•
Recommendation. We prefer the short end of the DONG
curve. In particular, we find the DONGAS 6.25% call
2023 too tight. We recommend selling this, possibly
replacing it with the shorter DONGAS 4.875% call 2018.
We also consider the DONGAS 3% call 2020 too tight.
•
Trade Idea - Sell DONG Energy 6. 25% call 2023 (EUR),
18 January.
Credit spread development
Mid Spread (EUR)*
ASW spread
Corporate hybrids BB+
500
600
GASSM (Ba1/BB+) 3.4% '24
RWE (Ba1/BB+) 3.5% '25
450
550
GASSM (Ba1/BB+) 4.1% '22
Corporate hybrids BBB-
ENBW (Baa2/BBB-) 3.6% '21
500
VATFAL (Baa2/BB+) 3% '27
Corporate hybrids BBB
DONGAS (Baa3/BB+) 6.3% '23
350
450
ENECO (NR/BBB) 3.3% '21
DONGAS (Baa3/BB+) 3% '20
EDF (Baa1/BBB) 4.1% '22
DONGAS (Baa3/BB+) 4.9% '18 SSELN (Baa2/BBB) 2.4% '21 VATFAL (Baa2/BB+) 6.1% '23
ENGIFP (A3/BBB+) 3.9% '24
400
350
300
250
VATFAL (Baa2/BB+) 3.1% '22
SEVFP (Baa2/NR) 2.5% '22
ENGIFP (A3/BBB+) 3.9% '18
ENELIM (Ba1/BB+) 6.5% '19
300
400
Corporate hybrids BBB+
200
SSELN (Baa2/BBB) 5.6% '17
IBESM (Baa3/BB+) 5.8% '18
250
150
Mar-2015
ENBW (Baa2/BBB-) 7.4% '17
200
1
2
3
4
5
6
7
8
9
* Z-spreads. Discount margin for floaters. Swapped to indicated currency. ** Years-to-worst
Note: Fair value curve(s) based on Danske Bank Markets' (mid) peer group of European issuers
Source: Bloomberg, Danske Bank Markets
10
11
12
YTW**
May-2015
Jul-2015
Sep-2015
VATFAL EUR 3% 2027 (Hybrid)
DONGAS EUR 4.875% 2018 (Hybrid)
DONGAS EUR 6.25% 2023 (Hybrid)
Source: Bloomberg, Danske Bank Markets
Nov-2015
Jan-2016
Buy Stena 2017 (EUR) – underweight on all other Stena bonds
Published on 14 January 2016
Key arguments for the trade
•
Attractive valuation. Following recent spread widening,
we believe the Stena 2017 trades at an attractive level.
•
Strong short-term liquidity profile. The full redemption
of the 2017 bond is covered by Stena’s current and
expected liquid resources by a healthy margin over the
next 12 months (as also confirmed by Stena’s CFO
during the Q3 15 conference call).
•
Covenant. We do not expect any bank covenant breach
to occur before the maturity of the Stena 2017 bond.
Relative value (EUR), indicative ask spreads
Credit risk set to increase in Stena. Due to the high
exposure to oil drilling (c.40% of EBITDA), we expect
lower cash flows, significantly higher leverage (possibly
over 8x adjusted net debt/EBITDA) and higher
refinancing risk in Stena in coming years.
•
Recommendation. We remain underweight on all
Stena’s bonds except the Stena 2017 bond. We
recommend buying the 2017 solely due to the strong
liquidity coverage and the attractive valuation.
•
Trade idea – Buy Stena 6.125% 2017 (EUR), 14 January.
Credit spread development
Credit Spread
(EUR)*
950
900
850
800
750
700
650
600
550
500
450
400
350
300
250
200
150
100
50
0
•
ASW Issue
Currency
530
STENA 7% '24
(USD)
480
STENA 5Y CDS
430
Industrials B's
STENA 7.9% '20
(EUR)
STENA 5.9% '19
(EUR)
380
STENA 5.8% '24
(USD)
330
280
STENA 6.1% '17
(EUR)
230
180
Industrials BB's
130
80
30
1
2
3
4
5
6
7
8
Years to maturity**
9
10
11
12
* Spreads are swapped to indicated currency and prioritised in accordance with availability of Z-spread, discount margin
** Years to legal maturity or years to first-call date
Note: Fair value curve(s) based on Danske Bank Markets' peer group of European issuers
Source: Bloomberg, Danske Bank Markets
-20
Jul-2015
Sep-2015
STENA EUR 6.125% 2017
COLLIN NOK 5.56% 2017
Source: Bloomberg, Danske Bank Markets
Nov-2015
Jan-2016
DFDSDC NOK 4.6% 2016
TALLNK NOK 6.16% 2018
SSAB – BUY SSABAS 3.875 2019 (EUR)
Published on 13 January 2016
Key arguments for the trade:
•
Fire sale following profit warning. The entire SSAB
curve and especially the SSAB EUR 2019s took a harsh
beating recently, trading down 13 full figures since the
profit warning in early December. We believe low yearend market liquidity is partly to blame for the steep fall.
•
Credit watch negative but with limited rating
downside. S&P has placed SSAB’s ‘BB-’ rating on CW
negative but to our (positive) surprise the potential
downgrade seems limited to one notch.
Relative value (EUR), ask spreads
•
Attractive valuation. Despite tough steel market
conditions, we believe the price reaction is overdone and
we see the current level as a good entry point. The SSAB
EUR 2019s (ASK Z+863bp) trade almost 300bp wider
than the SSAB SEK 2019s and some 200bp wider than
the ‘B’ rated EUR industrials curve, indicating attractive
value, even in the case of a two-notch downgrade.
•
Trade Idea - Buy SSAB EUR 2019, 13 January.
Credit spread development
Credit Spread
(EUR)*
1000
1000
900
OUTOK 6.6% '19
(EUR)
Industrials B
800
700
SSABAS 4.6% '19
(SEK)
600
Industrials B+
500
SSABAS 4.9% '17
(SEK)
400
Industrials BB-
300
ASW/DM in basis points
SSABAS 3.9% '19
(EUR)
900
800
700
600
500
400
200
300
100
Years to maturity**
0
1
2
3
4
5
6
7
* Spreads are swapped to indicated currency and prioritised in accordance with availability of Z-spread,
discount margin
** Years to legal maturity or years to first-call date
Fair value curves based on a sample of European issuers
Source: Bloomberg, Danske Bank Markets
8
SSABAS 3 7/8 04/10/19
SSABAS 0 04/03/18
SSABAS 4 5/8 02/25/19
Source: Bloomberg, Danske Bank Markets
OUTOK 6 5/8 09/30/19
SSABAS 4 7/8 12/13/17
Recent trade ideas (high yield)
Type
Outright
Trade
Sell DONG Energy call 2023
Outright
Buy Stena EUR2017
Attractive valuation 2017 bond. We remain
underweight all other Stena bonds.
Outright
Buy SSAB EUR2019
The SSAB EUR2019 currently trades at very
attractive levels compared with other outstanding
SSAB bonds and compared with the current 'BB-'
rating from S&P.
Buy Norwegian Air Shuttle
EUR2019
The Norwegian Air Shuttle EUR2019 currently trades
at very attractive level compared with other outstanding
NAS bonds and compared with our B+/NO shadow
rating.
Switch
Buy Color Group NOK 2019, Sell
Tallink NOK 2018
Color Group spread pickup is attractive versus Tallink.
Outright
Buy Color Group NOK 2019
Spread wide for the assessed rating.
Switch
Sell Stena 2020, Buy TDC hybrid Fundamentally, we see increased credit risk in Stena and Opened
recommend investors switch into names with the same
Outright
Idea
The long end of the DONG Energy hybrid curve is
too tight.
Opened
Start spread
Opened
Start spread
18 Jan 2016
497
14 Jan 2016
467
Opened
13 Jan 2016
Start spread
Opened
777
07 Dec 2015
Start spread
692
Opened
Start spread
27 Oct 2015
105
Opened
Start spread
27 Oct 2015
569
01 Oct 2015
or stronger credit profiles such as TDC (hybrid).
Start spread
Switch
Outright
Sell Stena 2020, Buy Volvo
hybrid
Fundamentally, we see increased credit risk in Stena and
recommend investors switch into names with the same
or stronger credit profiles such as Volvo (hybrid).
Close of Trade Tallink NOK 2018
Bonds trade tight to 'BB-' curve and bonds no longer
attractive. We take profit on trade initiated 27 February
2015 (TR: 3.9% / ann. TR 7.9%).
Opened
Start spread
Opened
Start spread
-27
01 Oct 2015
6
08 Sep 2015
440
Source: Danske Bank Markets
See the end of this document for a list of our coverage including shadow ratings and recommendations.
8
Best and worst performers (Nordic coverage universe)
- High yield
1 month in local currencies
YTD in local currencies
Teekay Offshore Partners LP NOK 2016
-178
Teekay Offshore Partners LP NOK 2016
-177
Teekay Offshore Partners LP/Teekay…
-63
Beerenberg Holdco II AS NOK 2018
-63
Beerenberg Holdco II AS NOK 2018
-63
Beerenberg Holdco II AS NOK 2018
-63
Beerenberg Holdco II AS NOK 2018
-27
Teekay Offshore Partners LP NOK 2017
-27
Teekay Offshore Partners LP NOK 2017
-27
Teekay Offshore Partners LP NOK 2017
-27
Teekay Offshore Partners LP NOK 2017
-6
Norwegian Air Shuttle ASA NOK 2018
-10
Norwegian Air Shuttle ASA EUR 2019
-5
Norwegian Air Shuttle ASA NOK 2017
-5
Norwegian Air Shuttle ASA NOK 2017
-2
Norwegian Air Shuttle ASA EUR 2019
-2
Meda AB SEK 2019
-1
Meda AB SEK 2019
-714
-1
Nokia OYJ EUR 2019
0
Meda AB SEK 2018
240
Teekay Offshore Partners LP NOK 2019
228
Teekay Offshore Partners LP NOK 2019
240
Teekay Offshore Partners LP NOK 2019
228
Teekay Offshore Partners LP NOK 2019
402
Seadrill Ltd USD 2020
282
J Lauritzen A/S NOK 2017
435
J Lauritzen A/S NOK 2017
384
Fred Olsen Energy ASA NOK 2019
473
Fred Olsen Energy ASA NOK 2019
387
Seadrill Ltd USD 2020
569
Seadrill Ltd SEK 2019
2000 1500 1000 500
0
-500 -1000
Seadrill Ltd NOK 2018
1,161
North Atlantic Drilling Ltd USD 2019
Change in local currencies (bp)
North Atlantic Drilling Ltd NOK 2018
962
Seadrill Ltd USD 2017
1,760
North Atlantic Drilling Ltd USD 2019
717
North Atlantic Drilling Ltd NOK 2018
1,271
1,587
Seadrill Ltd SEK 2019
569
Seadrill Ltd NOK 2018
1,260
Seadrill Ltd USD 2017
1,595
2000
1500
1000
500
0
-500
Change in local currencies (bp)
Source: Bloomberg, Danske Bank Markets (both charts)
9
Danske Bank Markets Nordic High-Yield Index
• The start of 2016 has been a rough ride for the European
high-yield credit markets.
• iTraxx crossover has so far widened some 66bp YTD (+30bp
over the past week) and currently trades around 378bp.
• Since the start of the year, our Danske Bank Markets
Nordic High-Yield Index has widened some 37bp (+17bp
over the past week) following the same trend as the
broader EUR market. We caution that the liquidity in the
Nordic high-yield market is currently very thin.
• Probably due to the current volatile market conditions, we
are still waiting for the first primary Nordic high-yield
transaction in 20 16.
Key index statistics
Date
Yield
ASW spread, bps
# Bonds
AVG credit rating
Avg duration
TR since start
TR YTD
TR MTD
Danske Bank Markets Nordic High-Yield Index
105.0
104.5
104.0
103.5
103.0
102.5
102.0
101.5
101.0
100.5
100.0
Dec/2014 Mar/2015 Jun/2015
575
550
525
500
475
450
425
400
375
350
325
300
Sep/2015 Dec/2015
DBM Hedged EUR Nordic HY Index Value
DBM Nordic HY Index, ASW-spread (bps). RHS
Index sector breakdown
Index start
Index end
Change
31/Dec/2014 15/Jan/2016
5.5%
430
553
123
107
BB
3.0
-0.1%
-1.5%
-1.5%
Real estate
13%
Utilities
7%
Technology
2%
Basic
Materials
12%
Communicat
ions
8%
Consumer,
non-cycli.
10%
Consumer,
Cyclical
9%
Industrial
19%
Energy
14%
Diversified
4%
Source: Bloomberg, Danske Bank Markets [all tables and charts]
10
Recent Nordic high-yield issuance
Selected new issues (High Yield)
Date
Issuer
Coupon
Ccy
Volume
Maturity
S&P / Mdy / Fitch ASW/DM
15/12/2015
Bulk Industrier As
NIBOR3M +700bps
NOK
200 m
Dec/18
/ /
700
15/12/2015
Bong Ab
10%
SEK
200 m
Dec/18
/ /
1024
11/12/2015
Barcode 121 Holding Ag
3.75%
NOK
2 535 m
Dec/24
/ /
232
11/12/2015
B121 Holding As
5.75%
NOK
390 m
Dec/20
/ /
444
10/12/2015
Stockmann Ab (Hybrid)
7.75%
EUR
85 m
PERP
/ /
717
09/12/2015
West Atlantic Ab
6.5%
SEK
850 m
Dec/19
/ /
611
01/12/2015
Norwegian Air Shuttle As
7.25%
EUR
125 m
Dec/19
/ /
700
19/11/2015
Ab Stena Metall Finans
STIB3M +350bps
SEK
1 000 m
Nov/20
/ /
350
17/11/2015
Jefast Holding Ab
STIB3M +650bps
SEK
200 m
Jan/19
/ /
650
13/11/2015
Vattenfall Ab (Hybrid)
6.1%
USD
400 m
Nov/78
BB+ / Baa2 / A-
406
0.125%
EUR
340 m
Nov/20
/ /
-
STIB3M +250bps
SEK
300 m
Apr/18
BB- *- / /
250
29/10/2015 Marine Harvest Asa (Convertible)
26/10/2015
Ssab Ab
21/10/2015
Verisure Holding Ab
STIB3M +725bps
SEK
2 816 m
Oct/23
CCC+ / Caa1e /
725
21/10/2015
Verisure Holding Ab
EUR003M +725bps
EUR
400 m
Oct/23
CCC+ / Caa1e /
725
23/10/2015
Verisure Holding Ab
6%
EUR
700 m
Nov/22
B / B1 /
591
01/10/2015
Finnair Oyj (Hybrid)
7.875%
EUR
200 m
PERP
/ /
754
16/09/2015
Akelius Residential Ab
3.375%
EUR
300 m
Sep/20
BB+ / /
300
03/09/2015
Lock As
7%
EUR
30 m
Aug/21
B+ / B2 /
505
03/09/2015
Lock As
5.5%
EUR
200 m
Aug/20
B+ / B2 /
550
03/09/2015
Np3 Fastigheter
STIB3M +490bps
SEK
300 m
Oct/18
/ /
490
02/09/2015
Sagax Ab
EUR006M +350bps
EUR
30 m
Sep/20
/ /
350
13/07/2015
Boa Offshore As
NIBOR3M +1000bps
NOK
150 m
Dec/18
/ /
1000
06/07/2015
Gripship As
NIBOR3M +650bps
NOK
210 m
Jul/18
/ /
650
03/07/2015
Digiplex Norway As
NIBOR3M +375bps
NOK
575 m
Jul/19
/ /
375
Source: Bloomberg, Danske Bank Markets
11
Company news from the past week (high yield)
Name
J Lauritzen
News
J. Lauritzen (B/B-). Reports suggest J. Lauritzen has sold another Handysize vessel, to a Turkish buyer
for USD7.5m. This is its fifth Handysize sale over the past month. The company continues to divest
vessels at extremely low levels but, from a credit perspective, the vessels are burning cash and are
likely to do so throughout 2016, so sales and repayment of debt/accumulating cash are something we
regard as credit positive. It should ensure the company remains well in compliance with its minimum
liquidity covenant of at least USD50m of cash.
Implication
Credit positive
Stockman
Stockmann (Danske Bank Markets: B+/NR). The December sales figure was roughly in line with our
estimates, amounted to EUR173.7m, of which the continuing business (Stockmann and Lindex)
accounted for EUR146m. Sales in the continuing business were up 1.6% y/y due to excellent
Christmas sales in Lindex. Overall, the December sales figures are neutral from a credit perspective.
In our view, the key thing to watch is how the turnaround progresses going into 2016. We maintain
our ‘B+’ rating on the name.
Credit neutral
Stena
Stena (UW). Last week, Stena Drilling confirmed that the idle Stena Carron drillship has been awarded
a new drilling contract by Esso Exploration and Production Guyana Limited (Exxon Mobil). The contract
is for a period of one year at USD235,000 per day plus a six-month option with further options to be
agreed at the market rate. The unit has begun mobilisation to its location and commencement is
planned for the end of January 2016. Simultaneously, the dayrate for Stena Forth, contracted by Hess,
has been reduced to USD498,000 per day from USD563,000 per day for the remaining contract
period until end-June 2017. All in all, the EBITDA in Stena Drilling’s cash flow will be net positively
affected by up to some SEK200m by the contract changes overg the next year. Due to the limited
positive cash flow impact for the group, this does not change our view with regard to Stena. We
continue to see an increased risk of a negative fall in free cash flow in 2016 and 2017, while leverage
may increase to more than 8x (measured as adjusted net/adjusted LTM EBITDA) over the next two
years.
Credit positive
Source: Danske Bank Markets
12
Company news from the past week (high yield)
Name
SAS
News
SAS (B-/S) reported mixed traffic figures for December 2015. Traffic increased by 8% on the back of
13% y/y greater capacity (mainly long haul additions). This led the load factor to decline by 3pp to just
68%. The large capacity additions also led to a significant decline in average ticket prices (-9% y/y),
explained partly by the greater stage length. However, SAS noted a reduction in bookings in November,
which affected traffic negatively in December. Furthermore, SAS notes that market capacity has
started to increase, which is likely to continue to put pressure on ticket prices. Overall, this is likely to
put some margin pressure on SAS, although we expect lower fuel costs to offset this. Overall, SAS’s
traffic figures were slightly disappointing.
Implication
Credit negative
Norwegian Air
Shuttle
Norwegian Air Shuttle (Danske Bank Markets: BB-/NO). In terms of the read-across from SAS, as
Norwegian Air Shuttle (NAS) has a significantly lower operating cost base than SAS, we do not believe
the increased price pressure will translate into significant margin pressure on NAS, as SAS simply
cannot lower prices much before it reaches breakeven in margin terms. If SAS breaks even, NAS will
continue to have a healthy EBIT margin. In conclusion, we do not believe the poor traffic numbers from
SAS should have any meaningful impact on NAS bonds.
Credit neutral
Stockmann
Stockmann (Danske Bank Markets: B+). We now have a little more colour on the additional EUR20m
tax bill from the Swedish and Finnish government. The decision relates to irregularities regarding
transfer pricing and the bill is due to be split roughly evenly between the two governments. According
to Stockmann, the decision is unfounded and an appeal has been made. The tax will be booked in the
2015 financial statements but Stockmann has applied to prolong the actual payment until a decision
has been made. As such, we expect there to be a significant delay beyond Q4 before this will have a
cash flow effect. The amount corresponds to around 0.1x in additional adjusted net debt to EBITDA, so
overall this is neutral for the credit. The main thing to watch, in our view, is still the turnaround
process, which we are fairly confident will begin to improve results in 2016.
Credit negative
Source: Danske Bank Markets
13
Scandi investment grade
14
Trade Idea – Buy DFDS NOK 2016
Published on 30 November 2015
Relative value (NOK), ask spreads
BUY –
DFDS 2016
Credit Spread
(NOK)*
ISIN:
225
Industrials BB's
200
175
NO0010643281
Currency
NOK
DBM shadow rating
`BBB-`
Type of instrument
Senior unsecured
150
Coupon Type
125
DFDSDC (NR/NR)
FRN '18
MAERSK
(Baa1/BBB+)
6.3% '16
100
75
Industrials BBB's
DFDSDC (NR/NR)
FRN '16
FRN
Coupon
3M NIBOR +350bp
Maturity
May 2, 2016
50
Cash price
101.10 (indicative, ask)
25
Callable
Yes, in case of change of
control event.
0
0
1
2
3
Years to maturity**
* Spreads are swapped to indicated currency and prioritised in accordance with availability of Z-spread, discount margin
** Years to legal maturity or years to first-call date
Source: Bloomberg, Danske Bank Markets
Current YTM
approx. 2.0% p.a.
DM
+86bp
Source: Bloomberg, Danske Bank Markets
We view DFDS’s credit profile on par with a ‘BBB-’ shadow rating (bond issue level). DFDS has indicated a willingness to
increase leverage significantly if the right acquisition target shows up, possibly to a level of 4-5x net debt/EBITDA versus the
current level of 0.9x.
From both a relative value and absolute perspective, we believe DFDS FRN 2016 is an attractive alternative to money-market
investments with similar placement horizon. In contrast to the two other outstanding DFDS bonds, we think the DFDS FRN
2016 is protected from adverse M&A event risk.
As an alternative to DFDS FRN 2016, the slightly longer Maersk 6.25% 2016 in NOK seems to offer good value at current
pricing.
See also DFDS: Q3 15 - strong performance again but leverage set to rise, 19 November 2015.
Recent trade ideas (investment grade)
Type
Outright
Trade
Buy DFDS NOK FRN 2016
Idea
Outright
Close of buy Neste EUR2022
We close our Buy Neste 22s trade recommendation.
Switch
Buy Securitas EUR 2021, Sell
G4S EUR 2018
One notch higher rating and no risk of near-term M&A
in Securitas make pickup attractive.
Buy Securitas EUR 2021
Spread has widened too much post the Diebold
acquisition.
Outright
Buy Vestas 2022 (revisited).
The Vestas EUR 2.75% 2022 trades cheap to a
EUR corporate BBB curve.
Outright
Buy Nykredit AT1 (perpetual)
Nykredit has issued an AT1 with a 7.125% trigger.
This hybrid trade ais ttractive to Nordic peers.
Outright
Buy Nykredit T2 CoCo first call
2021 (dated)
Nykredit has issued a tier 2 bond as a CoCo with a 7%
trigger. We believe the T2 CoCo trades with a
discount to peers because of the CoCo feature.
Sector spread
Switch from Securitas 2018 to
ISS Global A/S 2020
We recommend buying the ISS Global A/S 2020, as
we believe valuation is attractive compared with ISS
Global A/S’ BBB-/Positive Outlook from S&P as the
bond is currently trading close to the ‘BBB-’ curve.
Short FRN trades attractive both on RV and absolute
basis.
Opened
Start spread
Opened
Start spread
Outright
Opened
Start spread
Opened
Start spread
Opened
Start spread
Opened
Start spread
30 Nov 2015
86
16 Nov 2015
161
09 Nov 2015
16
09 Nov 2015
92
24 Aug 2015
270
10 Aug 2015
511
Opened
10 Aug 2015
Start spread
Opened
361
03 Jun 2015
Start spread
32
Source: Danske Bank Markets
See the end of this presentation for a list of our coverage including shadow ratings and recommendations
16
Best and worst performers (Nordic coverage universe)
- Investment grade
1 week in local currencies
Fortum Varme Holding samagt med…
-10
Statkraft AS NOK 2025
-4
Fortum Varme Holding samagt med…
-8
Fortum Varme Holding samagt med…
-4
Swedish Match AB SEK 2020
-8
Swedish Match AB SEK 2020
-5
-3
Vattenfall AB EUR 2024
-7
Fortum Varme Holding samagt med…
-3
Fingrid OYJ EUR 2024
-6
Skandinaviska Enskilda Banken AB EUR…
-3
Svenska Cellulosa AB SCA EUR 2023
-4
Vattenfall AB EUR 2024
-3
Telenor ASA EUR 2022
-4
TeliaSonera AB EUR 2022
-3
TeliaSonera AB EUR 2027
-4
Svenska Handelsbanken AB EUR 2021
-3
Telenor ASA EUR 2024
-4
Svenska Handelsbanken AB EUR 2022
-3
Svenska Handelsbanken AB EUR 2022
-4
Teollisuuden Voima Oyj EUR 2025
Telefonaktiebolaget LM Ericsson EUR…
5
Swedbank AB EUR 2017
Sampo Oyj EUR 2017
11
Statoil ASA EUR 2025
12
Svenska Handelsbanken AB EUR 2017
6
DONG Energy A/S EUR 2016
12
Telefonaktiebolaget LM Ericsson EUR…
6
Svenska Handelsbanken AB EUR 2017
13
Sampo Oyj EUR 2017
6
Telenor ASA EUR 2017
13
TeliaSonera AB EUR 2017
6
7
10
11
TeliaSonera AB EUR 2017
5
5
15
1 month in local currencies
Pohjola Bank Oyj EUR 2017
15
Telenor ASA EUR 2017
Statoil ASA EUR 2025
15
DONG Energy A/S EUR 2016
10
Svenska Cellulosa AB SCA EUR 2016
10
Neste Oyj EUR 2016
5
0
-5
-10
Change in local currencies (bp)
Svenska Cellulosa AB SCA EUR 2016
22
Neste Oyj EUR 2016
31
40
30
20
10
0
-10
-20
Change in local currencies (bp)
Source: Bloomberg, Danske Bank Markets (both charts)
17
Selected new investment-grade issues
Date
Issuer
Coupon
Ccy
Volume
Maturity
S&P / Mdy / Fitch ASW/DM
15/01/2016
Sparebanken Telemark
NIBOR3M +135bps
NOK
200 m
Jan/21
/ /
135
13/01/2016
Pohjola Bank Plc
0.875%
EUR
500 m
Jun/21
AA- / Aa3e / WD
65
12/01/2016
Jaren Sparebank
NIBOR3M +150bps
NOK
200 m
Jul/20
/ /
150
13/01/2016
Caisse Centrale Desjardn
EUR003M +30bps
EUR
1 000 m
Jan/18
A+ / Aa2 / AA-
30
13/01/2016
Vasakronan Ab
1.68%
SEK
500 m
Jan/21
/ /
115
13/01/2016
Klp Banken As
NIBOR3M +114bps
NOK
300 m
Jan/19
/ / A-e
114
13/01/2016
Rikshem Ab
STIB3M +110bps
SEK
1 000 m
Jan/20
A- / /
110
13/01/2016
Lyse As
NIBOR3M +140bps
NOK
300 m
Jan/21
/ /
140
12/01/2016
Rabobank Nederland
EUR003M +17bps
EUR
2 000 m
Jan/17
A+ / Aa2e / F1+
17
12/01/2016
Daimler Canada Finance
1.875%
NOK
500 m
Jan/21
/ A3e / A-e
77
11/01/2016
Banco Bilbao Vizcaya Arg
1%
EUR
1 000 m
Jan/21
BBB+ / Baa1 / A-e
85
11/01/2016
Bpce Sa
0.625%
EUR
1 000 m
Apr/20
A / A2e / A
55
11/01/2016
Abn Amro Bank Nv
2.875%
EUR
1 000 m
Jan/28
BBB- / Baa3 / A-
245
11/01/2016
Banque Fed Cred Mutuel
1.625%
EUR
1 250 m
Jan/26
A / Aa3 / A+e
80
Source: Bloomberg, Danske Bank Markets
18
Company news from the past week (investment grade)
Name
News
Implication
Norwegian
banks
Norwegian banks. On Monday, the Norwegian Finance Department commented on the Norwegian
FSA's proposal for how to handle Pillar 2 requirements in Norway. The Finance Department suggests
that Pillar 2 requirements will be made publicly available if possible in the future (as in Denmark for a
while and since Q3 15 in Sweden) and that they are made a formal/hard requirement. However,
despite being a hard requirement, the Finance department suggests the Pillar 2 requirement is not
effecting the MDA level (as seen in Sweden and so far in Denmark). In conclusion, disclosure of Pillar 2
requirements was expected and follows other countries. That the Pillar 2 requirement will not affect
the MDA level is positive, as it reduces the risk of skipping a coupon on the AT1s. All in all, we view this
as a small positive for Norwegian AT1s. This said, we see that DNB's AT1 call 20' (USD) has widened
a significant 95bp over the past month, which we think is due to the letter from the Norwegian FSA at
the beginning of January asking banks to reconsider their loan losses due to the oil plunge. This fits
well with our general negative stand on the Norwegian banks and the Norwegian economy.
Credit positive
Citycon
Citycon. Late on Friday, Moody’s upgraded Citycon’s rating from Baa2 to Baa1, reflecting the improved
business risk profile following the Sektor acquisition. The rating institute highlights the greater
geographical diversification as well as scale and reduced tenant concentration. Moody’s also sees the
divestment of non-core assets as positive. For us, the upgrades are fairly unexpected despite the
strong operational performance, as we thought that Moody’s should wait a bit more to see the full
effect of the Sektor integration. Following the news on Friday, with the CEO pointing at a higher number
of divestments of non-core assets over the next two years and increased focus on Sweden, we argue
that the operational part of the business will continue to improve.
Credit positive
Atlas Copco
Atlas Copco (UW) has added a EUR300m (c. SEK2.8bn) provision following a ruling by the government
of Belgium. The provision covers potential liabilities from 2010-15 and would increase the company’s
effective tax rate by around 3.5pp. According to Atlas, payment of the tax is likely to take place in
Q2 16. Using the current LTM EBITDA, the payment would represent an increase in adjusted net debt
to adjusted EBITDA of c.0.2x. Overall, this is negative for the credit, as the increased tax rate
represents a larger cash outflow going forward. To mitigate this, Atlas could consider moving certain
functions (such as warehousing) out of Belgium.
Credit negative
Source: Danske Bank Markets
19
Company news from the past week (investment grade)
Name
Elenia
News
The ultimate shareholder of Elenia’s (MW) mother company Lakeside Network Inv. (LNI) has
announced that it plans to undertake a strategic review of its ownership in LNI. To recap, LNI did a
leveraged acquisition of Vattenfall’s Finnish distribution grid several years ago, forming the company
Elenia. According to Reuters, the strategic review means the investors in LNI are lining up Elenia for
sale. This could potentially be good news for Elenia’s bonds, as the complex ownership structure for
Elenia has potential to be simplified. This said, we do not expect meaningful deleveraging following a
sale. However, Elenia’s spread is elevated due to a premium for structure risk. This could be changed
going forward. Officially, though, the details of this strategic review are very scarce, so only mildly
credit positive given what we know now.
Implication
Credit positive
Ericsson
Ericsson (MW). Fitch has affirmed its 'BBB+' rating with a stable outlook. The agency highlighted
Ericsson's strong market position and record as well as its long-term approach to R&D. On the
negative side, Fitch highlights the increasing competitive pressure from large players such as Huawei
and Nokia-Alcatel Lucent. Overall, this news is neutral from a credit perspective, in our view.
Credit neutral
Vattenfall
Vattenfall (MW) has flagged that the current weak Swedish power prices, coupled with the high
nuclear tax (EUR8/MWh) and with high safety capex requirements, make all Vattenfall's reactors
unprofitable. Subsequently, Vattenfall has threatened that it could be necessary to close its Swedish
nuclear fleet. Consequently, some of the right wing parties in Sweden are expressing willingness to
reduce the nuclear tax. We think there is a chance this could happen but also stress that it is not
something that the current left-green coalition favours currently. This is slightly positive for Vattenfall.
Credit positive
Energy
On Wednesday, S&P reduced its future oil and gas price assumptions. It sees Brent at USD40/bl in
2016, USD45/bl in 2017 and USD50/bl in 2018 and beyond. Previously, the assumption was
USD55/bl in 2016, USD65/bl in 2017 and USD70/bl in 2018 and beyond. S&P is currently
reviewing all its companies under coverage with oil and gas exposure and states that this could lead to
downgrades of some companies. S&P expects this overhaul to be finalised within a month. The reason
for the revision is the usual suspects: lower futures prices and lower marginal production costs
(especially in the US), sluggish demand growth and continued high output despite lower spot prices
(and more coming from Iran). In the Nordic region, we see Statoil (UW) (AA-/NO) as a clear candidate
for a downgrade on the back of this. DONG Energy’s (MW) (BBB+/S) rating will also be weighed up but,
given the current strong metrics for the rating, we do not expect DONG to be downgraded.
Credit negative
Source: Danske Bank Markets
20
Company news from the past week (investment grade)
Name
Ericsson
TeliaSonera
Statoil
News
Ericsson and Huawei have agreed to extend the global patent licence agreement between the two
companies. The agreement includes a cross-licence that covers patents relating to both companies'
wireless standard-essential patents (including the GSM, UMTS and LTE cellular standards). Under the
agreement, both companies are able to access and implement the other company's standard essential
patents and technologies globally. As part of the renewed agreement, Huawei will make ongoing
royalty payments based on actual sales to Ericsson from 2016 onward. Further details of the
agreement are confidential as of yet. FY 2015 revenue projections for Ericsson remain at the
previously communicated level.
TeliaSonera will report Eurasia as discontinued operations in its FY 2015 report, with the results
affected by impairment charges. As previously announced, TeliaSonera has initiated a process of
reducing its presence and over time fully leaving Region Eurasia. This process is progressing, so it will
report Region Eurasia as held for sale and discontinued operations in its FY 2015 report. As a result,
operating income in Q4 15 will be affected by a non-cash impairment charge of SEK5.3bn related to
the operations in Uzbekistan. Further, it will also record a non-cash impairment charge of SEK1.9bn
related to the operations in Denmark. Impairments are negative but, given that they are non-cash, the
impact from a credit perspective is limited (Telia’s Q3 15 equity was SEK109bn). We find it positive
that Telia is exiting a volatile region, which should improve the business risk profile.
Statoil (UW) has acquired 11.9% of Lundin Petroleum for a total consideration of SEK4.6bn
(NOK4.4bn). This gives Statoil additional stakes in the Edvard Grieg and Johan Sverdrup Norwegian oil
fields. The latter has an estimated plateau production potential of more than 550boe/d and an
estimated break-even price slightly higher than USD36/bl (current price is USD30.4/bl). Currently
Statoil owns 40.0% of Johan Sverdrup and Lundin owns 22.6%. Statoil’s acquisition takes its stake in
Johan Sverdrup to 42.7%. After Q3 15, Statoil’s net debt stood at NOK103bn, making the impact of
the acquisition minor in terms of leverage impact. Overall, this acquisition is a testament to Statoil’s
continued focus on the Norwegian continental shelf and a belief in a longer term recovery of the oilprice. Recently, Statoil’s CEO has mentioned that Statoil, for now, plans to hang on to its relatively large
dividend payments, despite this leading it to weaker leverage. Overall, the acquisition announcement is
credit neutral in itself but the continued bullish signal from Statoil (M&A and shareholder friendliness
is a concern from a credit perspective, which is only partly mitigated by capex reductions). We
continue to believe that Statoil’s Aa2 S/AA- NO ratings will be downgraded in H1 16. This, coupled
with tight pricing, leads us to maintain our Underweight recommendation.
Implication
Credit neutral
Credit negative
Credit neutral
Source: Danske Bank Markets
21
Credit indicators
Credit Indicators
22
Chart pack: euro spreads and returns
Euro IG ASW, iBoxx indices
IG total return, iBoxx indices, 2014-01=100
Euro HY ASW, Merrill Lynch indices
HY total return, Merrill Lynch indices, 2014-01=100
Source: Macrobond Financial, Danske Bank Markets [all charts]
23
Chart pack: relative value
iTraxx vs iBoxx
EUR CDS spreads – Nordic banks
Source: Bloomberg, Macrobond Financial, Danske Bank Markets [all charts]
Euro vs US CDS indices - IG (Markit)
Source: Macrobond Financial, Danske Bank Markets [all charts]
Euro vs US HY bond indices (Merrill Lynch)
24
Chart pack: general market development
European swap and government yields
3M Libor, US and euro area
Euro swap curve spread
EUR/USD basis swaps
Source: Macrobond Financial , Danske Bank Markets [all charts]
25
Chart pack: high-yield funds flow
High-yield Europe ETF fund flow
High yield US ETF fund flow
Cumulative ETF-flow MEUR
Cumulative ETF-flow MEUR
2,500
2,000
1,500
1,000
500
0
Dec-2014
Mar-2015
Jun-2015
High Yield - Europe - Fixed Income
Sep-2015
Dec-2015
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
-1,000
Dec-2014
Mar-2015
Jun-2015
Sep-2015
Dec-2015
High Yield - North America - Fixed Income
Source: Bloomberg, Danske Bank Markets [all charts]
26
Chart pack: fund flows
Europe, net sales
US, net sales
Sweden, net sales
Norway, net sales
Source: Macrobond Financial, Danske Bank Markets [all charts]
27
Chart pack: macro
GDP y/y growth, calendar adjusted
Purchasing Manager Indices
Euro area y/y change in bank lending
Euro area lending standards
Source: Macrobond Financial, Danske Bank Markets [all charts]
28
Coverage universe, credit ratings
and recommendations
29
Our coverage and shadow ratings 1 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
Ahlstrom Oyj
Akelius Residential Property Ab
Ambu A/S
Ap Moeller - Maersk A/S
Arla Foods Amba
Atlas Copco Ab
Avinor As
Bank 1 Oslo Akershus As
Bank Norwegian As
Beerenberg Holdco Ii As
Billerudkorsnas Ab
Bw Offshore
Cargotec Oyj
Carlsberg Breweries A/S
Castellum Ab
Cermaq Asa
Citycon Oyj
Color Group As
Com Hem Holding Ab
Corem Property Group Ab
Danfoss A/S
Danske Bank A/S
Deep Sea Supply Plc
Destia Group Oy
Dfds A/S
Dlg Finance As
Dna Ltd
Dnb Bank Asa
Dof Asa
Dof Subsea As
Dolphin Group As
Dong Energy A/S
Danske Bank
S&P
Moody's
Fitch
Analyst(s)
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
BBStable
M. Rosendal / J. Magnussen
BBB- Stable
E. Hjalmarsson / L. Landeman
BBB- Stable
J. Magnussen / M. Rosendal
BBB+ Stable Baa1
Pos
B. Børsting/J. Magnussen
BBB
Stable
M. Rosendal / B. Børsting
A
Stable
A2
Stable
A
Stable M. Rosendal / E. Hjalmarsson
AAStable
A1
Stable
G. Bergin / L. Landeman
BBB+ Stable
L. Holm / K. Jensen
BBB
Stable
L. Holm / K. Jensen
B
Stable
Ø. Mossige
BBB- Stable
M. Rosendal / L. Landeman
BB+
Stable
Ø. Mossige
BBB- Stable
M. Rosendal / E. Hjalmarsson
Baa2
Neg
BBB
Stable
B. Børsting / M. Rosendal
BBB- Stable
L. Landeman / P. Ahmarinejad
BB
Stable
K. Bakken
BBB
Stable Baa1
Stable
E. Hjalmarsson / L. Landeman
BBStable
B+
N. Ripa / B. Børsting
BBPos
M. Rosendal / J. Magnussen
BBStable
B+
E. Hjalmarsson / L. Landeman
BBB
Stable
J. Magnussen / B. Børsting
A
Stable
A2
Stable
A
Stable
BNeg
I. Båtvik / Ø. Mossige
BBStable
B+
M. Rosendal / E. Hjalmarsson
BBB- Stable
N. Ripa / B. Børsting
BBStable
M. Rosendal / B. Børsting
BBB- Stable
M. Rosendal / J. Magnussen
A+
Neg
Aa3
Stable
L. Holm / K. Jensen
B+
Neg
I. Båtvik/Ø. Mossige
B+
Neg
I. Båtvik/Ø. Mossige
I. Båtvik
BBB+ Stable Baa1
Stable BBB+ Stable J. Magnussen / L. Landeman
Recomm.
OVERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
OVERWEIGHT
UNDERWEIGHT
MARKETWEIGHT
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
30
Our coverage and shadow ratings 2 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Danske Bank
S&P
Moody's
Fitch
Analyst(s)
Company
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
Dsv A/S
BBB
Stable
B. Børsting / M. Rosendal
Eg Holding
B
Stable
J. Magnussen / N. Ripa
Eidesvik Offshore Asa
B
Neg
I. Båtvik / Ø. Mossige
Eika Boligkreditt As
AStable
L. Holm / K. Jensen
Eika Gruppen As
BBB
Stable
L. Holm / K. Jensen
Eksportfinans Asa
BBBPos
Ba3
Stable
L. Holm / K. Jensen
Electrolux Ab
BBB+ Stable
Wr
WD
B. Børsting / M. Rosendal
Elenia Oy
BBB
J. Magnussen / L. Landeman
Elisa Oyj
BBB+ Stable
Baa2
Stable
M. Rosendal / J. Magnussen
Entra Eiendom As
AStable
O. Heldal / L. Landeman
Farstad Shipping Asa
B
Stable
BI. Båtvik / Ø. Mossige
Fastpartner Ab
BB
Stable
BBL. Landeman / E. Hjalmarsson
Fingrid Oyj
A+
Pos
A1
Stable
A+
Stable
J. Magnussen / L. Landeman
Finnair Oyj
BB
Stable
B. Børsting / M. Rosendal
Fortum Oyj
BBB+ Stable
Baa1
Stable BBB+ Stable
J. Magnussen / L. Landeman
Fortum Varme Holding Samagt Med Stockholms Stad Ab
BBB+ Stable
J. Magnussen / L. Landeman
Fred Olsen Energy Asa
BBStable
B+
S. Stormyr / B.K. Røed
G4S Plc
BBBStable
B. Børsting / M. Rosendal
Getinge Ab
BB+
Neg
L. Landeman / E. Hjalmarsson
Golar Lng Partners Lp
BB
Stable
BBB.K. Røed / J. Meyer
Golden Close Maritime Corp Ltd
BS. Stormyr / B.K. Røed
Havila Shipping Asa
CCC+
Neg
I. Båtvik / Ø. Mossige
Heimstaden Ab
BB
Stable
BBL. Landeman / E. Hjalmarsson
Hemso Fastighets Ab
AStable
E. Hjalmarsson / L. Landeman
Hexagon Ab
BBBStable
E. Hjalmarsson / L. Landeman
Hkscan Oyj
BB
Stable
B. Børsting / M. Rosendal
Hoegh Lng Holdings Ltd
BBStable
B+
B.K. Røed / J. Meyer
Hoist Kredit Ab
BBStable
B+
G. Bergin / L. Landeman
Husqvarna Ab
BBBPos
E. Hjalmarsson / L. Landeman
Ica Gruppen Ab
BBB
Stable
G. Bergin / L. Landeman
Ikano Bank Ab
BBB
Stable
L. Holm / K. Jensen
Investor Ab
AAStable
Aa3
Stable
B. Børsting / M. Rosendal
Iss A/S
BBBPos
B. Børsting / M. Rosendal
Recomm.
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
UNDERWEIGHT
MARKETWEIGHT
OVERWEIGHT
OVERWEIGHT
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
31
Our coverage and shadow ratings 3 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
J Lauritzen A/S
Jefast Holding Ab
Jernhusen Ab
Jyske Bank A/S
Kemira Oyj
Kesko Oyj
Klaveness Ship Holding As
Klovern Ab
Lantmannen Ek For
Loomis Ab
Luossavaara-Kiirunavaara Ab
Meda Ab
Metsa Board Oyj
Metso Oyj
Ncc Ab
Neste Oyj
Nibe Industrier Ab
Nokia Oyj
Nokian Renkaat Oyj
Nordax Bank Ab
Nordea Bank Ab
North Atlantic Drilling Ltd
Norwegian Air Shuttle Asa
Norwegian Property Asa
Nykredit Bank A/S
Nynas Group
Ocean Rig Udw Inc
Ocean Yield Asa
Odfjell Se
Olav Thon Eiendomsselskap Asa
Olympic Ship As
Orava Residential Reit Plc
Danske Bank
S&P
Moody's
Fitch
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
B
Stable
BB
Stable
B
AStable
AStable Baa1U Stable
BBBStable
Wr
BBB
Stable
BBStable
B+
BB+
Stable
BB
BBBStable
BBBStable
BBB
Stable
BBStable
BB
Stable
Ba2
Stable
BBB
Stable
Baa2
Stable
BBBStable
BBBStable
BBBStable
BB+
Pos
Ba2
Stable
BB
Pos
BBB+ Stable
BBBStable
AANeg
Aa3
Stable
AAStable
B+
Neg
B
BBNeg
B+
BBBStable
A
Neg
Baa3U Stable
A
Stable
B+
Stable
B+
BStable
Ca
Neg
BB
BBB+
Stable
B
BBB+ Stable
B+
Stable
B
B+
Stable
B+
Analyst(s)
Recomm.
B.K. Røed / J. Meyer
E. Hjalmarsson / L. Landeman
E. Hjalmarsson / L. Landeman
L. Holm / K. Jensen
OVERWEIGHT
M. Rosendal / L. Landeman
OVERWEIGHT
M. Rosendal / E. Hjalmarsson
B.K. Røed / J. Meyer
E. Hjalmarsson / L. Landeman
G. Bergin / L. Landeman
B. Børsting / M. Rosendal
L. Landeman / E. Hjalmarsson
L. Landeman / E. Hjalmarsson
M. Rosendal / E. Hjalmarsson
OVERWEIGHT
M. Rosendal / L. Landeman
MARKETWEIGHT
E. Hjalmarsson / L. Landeman
J. Magnussen / L. Landeman MARKETWEIGHT
E. Hjalmarsson / L. Landeman
M. Rosendal / J. Magnussen MARKETWEIGHT
J. Magnussen / M. Rosendal
L. Holm / K. Jensen
L. Holm / K. Jensen
UNDERWEIGHT
S. Stormyr / B.K. Røed
B. Børsting / M. Rosendal
O. Heldal / L. Landeman
L. Holm / K. Jensen
OVERWEIGHT
J. Magnussen / L. Landeman
S. Stormyr / B.K. Røed
Ø. Mossige
B.K. Røed / J. Meyer
O. Heldal / L. Landeman
I. Båtvik/Ø. Mossige
M. Rosendal / L. Landeman
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
32
Our coverage and shadow ratings 4 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Danske Bank
S&P
Moody's
Fitch
Analyst(s)
Company
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
Orkla Asa
BBB+
Pos
O. Heldal / L. Landeman
Outokumpu Oyj
BNeg
M. Rosendal / E. Hjalmarsson
Pacific Drilling Sa
BNeg
Caa2
Neg
S. Stormyr / B.K. Røed
Petroleum Geo-Services Asa
B+
Neg
B1
Neg
I. Båtvik
Pohjola Bank Oyj
AANeg
Aa3
Stable
WD
L. Holm / K. Jensen
Posten Norge As
AStable
G. Bergin / L. Landeman
Postnord Ab
BBB+ Stable
G. Bergin / L. Landeman
Prosafe Se
BB
Stable
BBS. Stormyr / B.K. Røed
Ramirent Oyj
BB+
Stable
B. Børsting / M. Rosendal
Rem Offshore Asa
BNeg
I. Båtvik / Ø. Mossige
Saab Ab
BBB+ Stable
Wr
E. Hjalmarsson / L. Landeman
Sandnes Sparebank
BBB+ Stable
L. Holm / K. Jensen
Sandvik Ab
BBB
Neg
M. Rosendal / E. Hjalmarsson
Sas Ab
BStable
Wr
Stable
B. Børsting / M. Rosendal
Sbab Bank Ab
A
Neg
A2
Stable
L. Holm / K. Jensen
Scania Ab
BBB+
Neg
M. Rosendal / B. Børsting
Schibsted Asa
BBB
Stable
O. Heldal / L. Landeman
Seadrill Ltd
BBStable
B+
S. Stormyr / B.K. Røed
Securitas Ab
BBB
Stable
Wr
B. Børsting / M. Rosendal
Ship Finance International Ltd
BB
Stable
BBWr
B.K. Røed / J. Meyer
Siem Offshore Inc
BNeg
I. Båtvik / Ø. Mossige
Skandinaviska Enskilda Banken Ab
A+
Stable
Aa3
Stable
A+
Pos
L. Holm / K. Jensen
Skanska Ab
BBB+ Stable
E. Hjalmarsson / L. Landeman
Skf Ab
BBB
Neg
Baa1
Neg
M. Rosendal / E. Hjalmarsson
Sognekraft As
BBB
Stable
BBB
J. Magnussen / L. Landeman
Solstad Offshore Asa
BBStable
B+
I. Båtvik / Ø. Mossige
Spar Nord Bank A/S
BBB+ Stable
L. Holm / K. Jensen
Sparebank 1 Boligkreditt As
AStable
L. Holm / K. Jensen
Sparebank 1 Nord Norge
A1
Stable
A
Stable
L. Holm / K. Jensen
Sparebank 1 Smn
A1
Stable
AStable
L. Holm / K. Jensen
Sparebank 1 Sr-Bank Asa
A1
Stable
AStable
L. Holm / K. Jensen
Sponda Oyj
BBBStable
E. Hjalmarsson / L. Landeman
Recomm.
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
UNDERWEIGHT
MARKETWEIGHT
OVERWEIGHT
UNDERWEIGHT
UNDERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
33
Our coverage and shadow ratings 5 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
Ssab Ab
St1 Nordic Oy
Statkraft Sf
Statnett Sf
Statoil Asa
Steen & Strom As
Stena Ab
Stockmann Oyj Abp
Stolt-Nielsen Ltd
Stora Enso Oyj
Storebrand Bank Asa
Storebrand Livsforsikring As
Sunnfjord Energi As
Suomen Hypoteekkiyhdistys
Svensk Fastighetsfinansiering Ab
Svenska Cellulosa Ab Sca
Svenska Handelsbanken Ab
Swedavia Ab
Swedbank Ab
Swedish Match Ab
Sydbank A/S
Tallink Grupp As
Tdc A/S
Technopolis Oyj
Teekay Lng Partners Lp
Teekay Offshore Partners Lp
Tele2 Ab
Telefonaktiebolaget Lm Ericsson
Telenor Asa
Teliasonera Ab
Teollisuuden Voima Oyj
Thon Holding As
Danske Bank
S&P
Moody's
Fitch
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
BBBB
Stable
AStable
Aaa
Stable
A+
Stable
Wr
Stable
AANeg
Aa2
Stable
BBB+ Stable
BB
Stable
B2
Stable
B+
Stable
BB+
Stable
BB
BB
Stable
Ba2
Stable
WD
BBB+ Stable
BBB+
Neg
Nr
Stable
BBB+ Stable
Baa1
Stable
BBBStable
BBBBBB
Neg
BBB
Stable
AStable
Baa1
Stable
AANeg
Aa2
Stable
AAStable
AStable
AANeg
Aa3
Stable
A+
Pos
BBB
Stable
Baa2
Stable
Baa1
Stable
BB
Stable
BBBBBStable
Baa3
Stable
BBBStable
BB+
Stable
BB
BB
Stable
BBBBStable
B+
BBB
Stable
BBB+ Stable
Baa1
Stable BBB+ Stable
A
Stable
A3
Stable
AStable
A3
Neg
AStable
BBBNeg
Wr
BBB
Stable
BBB+ Stable
Analyst(s)
Recomm.
M. Rosendal / L. Landeman
J. Magnussen / L. Landeman
J. Magnussen / L. Landeman
J. Magnussen / L. Landeman
J. Magnussen / L. Landeman
O. Heldal / L. Landeman
N. Ripa / B. Børsting
M. Rosendal / L. Landeman
B.K. Røed / J. Meyer
M. Rosendal / L. Landeman
L. Holm / K. Jensen
L. Holm / K. Jensen
J. Magnussen / L. Landeman
L. Holm / K. Jensen
Louis Landeman
M. Rosendal / B. Børsting
L. Holm / K. Jensen
G. Bergin / L. Landeman
L. Holm / K. Jensen
B. Børsting / M. Rosendal
L. Holm / K. Jensen
N. Ripa / J. Magnussen
M. Rosendal / J. Magnussen
L. Landeman / E. Hjalmarsson
Ø. Mossige
Ø. Mossige
M. Rosendal / J. Magnussen
M. Rosendal / J. Magnussen
M. Rosendal / J. Magnussen
M. Rosendal / J. Magnussen
J. Magnussen / L. Landeman
O. Heldal / L. Landeman
UNDERWEIGHT
OVERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
UNDERWEIGHT
MARKETWEIGHT
OVERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
UNDERWEIGHT
OVERWEIGHT
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
34
Our coverage and shadow ratings 6 of 6
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
Tine Sa
Upm-Kymmene Oyj
Vasakronan Ab
Vattenfall Ab
Vestas Wind Systems A/S
Victoria Park Ab
Volvo Ab
Wihlborgs Fastigheter Ab
Wilh Wilhelmsen Asa
Danske Bank
S&P
Moody's
Fitch
Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating Outlook
BBB+ Stable
BB+
Stable
Ba1
Stable
WD
AStable
BBB+
Neg
A3
Neg
ANeg
BBBBBStable
B+
BBB
Stable
Baa2
Stable
BBB
Stable
BB+
Stable
BB
BB+
Stable
Analyst(s)
Recomm.
O. Heldal / L. Landeman
M. Rosendal / L. Landeman
MARKET WEIGHT
E. Hjalmarsson / L. Landeman
J. Magnussen / L. Landeman MARKETWEIGHT
N. Ripa / J. Magnussen
OVERWEIGHT
L. Landeman / E. Hjalmarsson
M. Rosendal / B. Børsting
MARKETWEIGHT
L. Landeman / E. Hjalmarsson
B.K. Røed / J. Meyer
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
35
Fixed Income Credit Research team
Thomas Hovard, Chief Analyst
Head of Credit Research
+45 45 12 85 05
hova@danskebank.com
Louis Landeman, Senior Analyst
TMT, Industrials
+46 8 568 80524
llan@danskebank.com
Mads Rosendal, Analyst
Industrials, Pulp & Paper
+45 45 14 88 79
madro@danskebank.com
Jakob Magnussen, Senior Analyst
Utilities, Energy
+45 45 12 85 03
jakja@danskebank.com
Knut-Ivar Bakken, Senior Analyst
Fish Farming
+47 85 40 70 74
knb@danskebank.com
Katrine Jensen, Analyst
Financials
+45 45 12 80 56
katri@danskebank.com
Brian Børsting, Senior Analyst
Industrials
+45 45 12 85 19
brbr@danskebank.com
Lars Holm, Senior Analyst
Financials
+45 45 12 80 41
laho@danskebank.com
Gabriel Bergin, Analyst
Strategy, Industrials
+46 8 568 80602
gabe@danskebank.com
Niklas Ripa, Senior Analyst
High Yield, Industrials
+45 45 12 80 47
niri@danskebank.com
Bjørn Kristian Røed, Senior Analyst
Shipping
+47 85 40 70 72
bred@danskebank.com
Iver Christian Båtvik, Analyst
Shipping
+47 95 97 74 45
ibt@danskebank.com
Ola Heldal, Senior Analyst
TMT
+47 85 40 84 33
olh@danskebank.com
Sondre Dale Stormyr, Senior Analyst
Offshore Rigs
+47 85 40 70 70
sost@danskebank.com
Henrik René Andresen, Senior Analyst
Credit Portfolios
+45 45 13 33 27
hena@danskebank.com
Øyvind Mossige, Senior Analyst
Oil Services
+47 85 40 54 91
omss@danskebank.com
Emil Hjalmarsson, Analyst
Real Estate, Construction
+46 8 568 80634
emih@danskebank.com
Haseeb Syed
High Yield, Norway
+47 85 40 54 19
hsy@danskebank.com
36
Disclosures
This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S ('Danske Bank'). The authors of this research report
are Thomas Hovard, Chief Analyst, and Katrine Jensen, Analyst.
Analyst certification
Each research analyst responsible for the content of this research report certifies that the views expressed in the research report accurately reflect the
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certifies that no part of the compensation of the research analyst was, is or will be, directly or indirectly, related to the specific recommendations
expressed in the research report.
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37
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This research has been prepared by Danske Bank Markets (a division of Danske Bank A/S). It is provided for informational purposes only. It does not constitute or
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