Weekly Credit Update - Danske Bank · SBAB Bank AB EUR 2016 Nordea Bank AB EUR 2016 Pohjola Bank...

5 May 2015

Weekly Credit Update

Important disclosures and certifications are contained from page 27 of this report

Analyst Henrik René Andresen +45 1333327 [email protected]

Investment Research www.danskebank.com/CI

2

- Market news

- Company news

- Trade ideas

Contents

- Chart pack

- List of official and shadow ratings and recommendations

- Best and worst performers

3

Sources: Bloomberg, Danske Bank Markets (both charts)

What’s on our mind - General credit market news

• The European credit market continued to move more or less sideways. Over the week. iTraxx Main was unchanged at 60bp. iTraxx Crossover widened some 4bp to 269bp.

• In the Nordic region, we saw issuance from DONG Energy coming to the market, with a new corporate hybrid (NC 5.5 years) issuance size of EUR600m and printing at MS 281.9bp. The proceeds are set to be used to repay the DONG Energy 5.5% 3005 with first call date at the end of June 2015.

• The issuance of the new DONG Energy corporate hybrid comes on the back of strong issuance activity of corporate hybrid bonds. Thus, Bertelsmann (Germany), RWE (Germany), Centrica (UK), Bayer (Germany) and Air France-KLMhave issued corporate hybrid bonds within the past month.

• According to Bloomberg, non-financial borrowers have already issued more than EUR19bn. of subordinated debt compared with total issuance of EUR28 bn. in 2014. Consensus among market participants is that total issue size of corporate hybrid bonds in 2015 will significantly exceed the 2014 issuance of EUR28bn.

4

Best and worst performers - Investment grade

Source: Bloomberg, Danske Bank Markets

1 week in local currencies 1 month in local currencies

11.6

9.9

9.8

9.2

9.1

9.0

8.5

8.4

7.9

7.8

-9.0

-9.0

-9.5

-10.6

-11.4

-11.7

-17.1

-25.1

-32.9

-36.2

-40-30-20-1001020

Nordea Bank AB EUR 2022

DNB Bank ASA EUR 2022

Telenor ASA EUR 2022


DONG Energy A/S EUR 2022

Svenska Handelsbanken AB EUR 2022

SKF AB EUR 2019

Svenska Handelsbanken AB EUR 2021



SBAB Bank AB EUR 2016


Pohjola Bank Oyj EUR 2016

Danske Bank A/S EUR 2018

Lansforsakringar Bank AB SEK 2020

Neste Oil OYJ EUR 2016

SBAB Bank AB SEK 2018

Skandinaviska Enskilda Banken AB SEK …

TDC A/S EUR 2015

Danske Bank A/S SEK 2019

Change in local currencies (bp)

8.1

3.6

2.8

2.7

2.5

2.5

2.5

2.4

2.2

2.1

-11.2

-12.1

-13.5

-16.8

-17.5

-21.3

-23.6

-23.9

-33.5

-41.7

-50-40-30-20-1001020

Sampo Oyj EUR 2016

Pohjola Bank Oyj EUR 2018

Statoil ASA EUR 2020

Atlas Copco AB EUR 2023


TeliaSonera AB EUR 2019


Fortum OYJ EUR 2022

DONG Energy A/S EUR 2022

SKF AB EUR 2019



Danske Bank A/S EUR 2018

Nordea Bank AB SEK 2017

Lansforsakringar Bank AB SEK 2020

TDC A/S EUR 2015

SBAB Bank AB SEK 2018


Skandinaviska Enskilda Banken AB SEK …



5

Best and worst performers - High yield


1 week in local currencies 1 month in local currencies

38

29

19

18

13

12

12

11

10

10

-28

-28

-30

-31

-31

-34

-38

-55

-58

-82

-100-80-60-40-200204060

SAS AB SEK 2019

Olympic Ship AS NOK 2019

Klaveness Ship Holding AS NOK 2020

Teekay Offshore Partners LP/Teekay …

Stolt-Nielsen Ltd NOK 2018

Farstad Shipping ASA NOK 2018

BW Offshore Ltd NOK 2017

Solstad Offshore ASA NOK 2016


Prosafe SE NOK 2016

Odfjell SE NOK 2017

UPM-Kymmene OYJ USD 2027

Nokia OYJ USD 2039

SSAB AB SEK 2019

Meda AB SEK 2019

AX IV EG Holding III ApS DKK 2020

Seadrill Ltd USD 2017

Norwegian Air Shuttle ASA NOK 2017

SSAB AB SEK 2017

Golden Close Maritime Corp Ltd USD …


128

73

51

45

33

29

13

6

6

-1

-94

-102

-122

-143

-152

-162

-171

-184

-207

-245

-300-200-1000100200



SAS AB SEK 2019


Seadrill Ltd SEK 2019

SAS AB SEK 2017


Solstad Offshore ASA NOK 2016

Teekay Offshore Partners LP/Teekay …

Ahlstrom OYJ EUR 2015

Prosafe SE NOK 2018

Prosafe SE NOK 2019

Prosafe SE NOK 2020

Teekay Offshore Partners LP NOK 2019






Odfjell SE NOK 2015


6

SELL METSO 2019 2.625% – BUY SANDVIK 2026 2.500% – Sandvik offers value relative to its rating implied spread and similar rated Metso

Mads Rosendal +46 8 568 80594 [email protected]

* Benchmarked against Bloomberg <FMCI>GO


METSO '19 (BBB/Baa2)

SANDSS '26 (BBB/NR)

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

105

110

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Indicative ASW offer (bps)

EUR bonds - Investment Grade

Corporates: BBB-

Corporates: BBB

Corporates: BBB+

• In our view the Sandvik 2026 offers strong value relative to its ’BBB’ rating. Currently, the valuation suggests a risk of more than a one-notch downgrade, which in our view is unwarranted given Sandvik’s strong balance sheet and improving results despite weakness in the mining and energy sectors. See Sandvik: Q1 15 – Not

as bad as feared, 27 April 2015.

• We suggest selling the METSO 2019s, which have had a good run since the spin-off of the group’s Pulp, Paper & Power business in 2014. Metso and Sandvik have similar business exposure (mining and energy) but Sandvik is c.3x larger (in terms of revenues) and diversified into sectors to which Metso has no exposure.

• Being exposed to the EUR, Metso has not benefited from FX tailwinds to the same extent that SEK-exposed Sandvik has in recent quarters.

• Metso’s book-to-bill is weaker than Sandvik’s at less than 0.5x versus 1.0x.

mailto:[email protected]

http://danskeresearch.danskebank.com/abo/CreditUpdateSandvikQ115270415/$file/CreditUpdate_Sandvik_Q115_270415.pdf

7

Source: Danske Bank Markets

Recent trade ideas

See the end of this presentation for a list of our coverage including shadow ratings and recommendations

Type Trade Idea

Sector spread Switch from Metso 2019 to

Sandvik 2026

Sell METSO 2019s ,which have had a good run since the spin-off of the group’s Pulp, Paper & Power business. Metso and Sandvik have similar business exposure but Sandvik is c.3x larger and diversified into sectors to which Metso has no exposure.

Opened 2015-04-27

Start spread 56 Outright Buy Neste Oil 2022 The Neste Oil 2022 trades wider than the 'BB+'

curve making it seem cheap relative to our shadow rating of 'BBB-'

Opened 21/04/2015

Start spread 161 Outright Buy Akelius Residential 2019

in SEK

The Akelius Residential SEK 2019 FRN 3M Stibor+240bp trades wide relative to other similar unrated SEK bonds.

Closed 13/04/2015

Start spread 225 Outright Buy Vestas 2022 The Vestas EUR 2.75% 2022 trades cheap to a EUR

corporate ‘BBB’ curve. Opened 19/03/2015

Start spread 245 Outright Buy Tallink 2018 FRN Tallink 2018 in NOK trades cheap to a global

median ‘BB-’ credit curve (converted into NOK). Opened 27/02/2015

Start spread 470 Outright CITCON '3.75 We believe that CITCON'3.75 trades at an attractive

level relative to the ‘BBB’ curve. Opened 10/02/2015

Start spread 08 Outright EGASDK '20 EGASDK '20, which we see as 'B' indicatively, trades

far too cheaply relative to the industrial 'B' curve. Opened 02/02/2015

Start spread 661 Sector spread Switch from NDA AT1 to SEB

AT1

We have an Overweight recommendation on SEB and an Underweight recommendation on Nordea and we do not believe a 14bp pickup for a four-year maturity extension is worthwhile.

Opened 26/01/2015

Start spread -8

8

Name News Implication

YIT

We revise our outlook to Stable. The reported IFRS revenue fell by 2% y/y. Adjusting for currency effects, revenues rose by 10% y/y. Operating profit was up by 17% y/y and the EBIT margin was 6.9%, up from 5.8% in Q1 14. EBITDA was EUR40m compared with EUR27m in Q1 14. The focus is on the balance sheet and YIT managed to reduce interest-bearing debt by EUR80m in Q1. This is in line with the guidance of a reduction of EUR100m for 2015. However, we are surprised by the strong commitment ,doing more or less everything in Q1. The reduction is a result of the strong cash flow seen in Q4 and took net debt to EBITDA from 7.4x at year-end 2014 to 6.5x at end-Q1. All in all, we view this as a credit positive report. Our main concern has been the short-dated maturity profile and the small covenant headroom. Following the strong cash flow in Q4, the refinancing of the maturities in 2015 and the reduced covenant pressure, we revise out outlook to Stable for YIT’s B rating.

Credit positive

UPM-Kymmene

UPM-Kymmene presented a stable start to the year and Q1 was in line with our expectations for most items. The group's cost cutting programme is progressing well and as a result the EBITDA margin improved by 0.1pp compared with Q1 14. Adjusted net debt to EBITDA rose from 2.8x to 2.9x due to an increase in both working capital and pension liabilities. We see potential for UPM to return to investment grade status but this would require a further reduction in publication paper exposure as the balance sheet is already fairly strong for the rating. We maintain our Marketweight rating.

Credit neutral

Swedbank

Swedbank’s Q1 15 results were further testimony to a fundamentally strong bank. The ROE of 14.9%, cost-income ratio of 45%, CET1 full Basel III of 20.5% and loan loss ratio of 2bp speak for themselves. However, the strong fundamentals are fully reflected in the pricing of Swedbank's bonds and for this reason we maintain our Marketweight recommendation.

Credit neutral

DONG Energy

DONG Energy’s Q1 15 results were relatively strong. Group sales fell on lower energy prices, while group clean earnings fell less than we feared when adjusting for one-off items. Underlying items offsetting falling earnings were cost reduction and stronger wind power earnings. DONG's capex budget caused adjusted net debt to rise 3% q/q. Reported adjusted net FFO to net debt subsequently fell to 32%, from 36%, in line with the 'BBB+' category target and on track in terms of FY guidance of 30%. DONG announced that it will call the existing call 2015 hybrid and replace it with a new hybrid. We maintain our Marketweight rating due to tight pricing of DONG's senior bonds, preferring the DONGAS call 2018s.

Credit positive


Company news from the past week

9


TVO

TVO's Q1 15 results were a non-event from a credit perspective. It reported that the two operating reactors' combined capacity factor fell to 90% due to an unplanned outage at OL2. This is still a very strong level in a global context. TVO reported that total Finnish power demand fell 2% y/y. Group revenues fell 8% y/y and group metrics deteriorated in Q1. This remains irrelevant as TVO is a not-for-profit company with its fixed costs being covered by its shareholders. TVO did not offer any news regarding the OL3 delay, the Areva/Siemens arbitration or the decision to construct OL4. Overall, this was a credit neutral report. We maintain our Overweight rating as TVO's bonds trade too wide even if S&P decides to downgrade the company.

Credit neutral

SSAB

SSAB had a strong start to 2015, with Q1 15 adjusted operating profit outperforming consensus by almost 50%. Underlying operating profit improved by SEK538m y/y, driven by lower variable costs and currency, while being held back somewhat by weaker prices for steel and lower earnings in Ruukki Construction. Despite cash flow not being large enough to reduce net debt levels, credit metrics still managed to improve on better earnings. We expect further credit metric improvements over the year (albeit at a slower pace) as weaker quarters roll over.

Credit positive

Sandvik

Sandvik had a decent start to 2015. Overall sales rose 12% y/y, driven mainly by currency effects, while the clean operating profit rose 18% y/y. Positively, demand in Mining was stable, at a low level, with the aftermarket slowly showing signs of recovery. The uncertainty surrounding the oil price is affecting order intake in Sandvik and Venture but not to the extent feared. Leverage declined on the back of a strong SEK2.4bn cash flow from operations, and credit metrics are, in our view, commensurate with the current ‘BBB’ rating. We find the longer dated Sandvik EUR bond attractively priced and change our recommendation from Marketweight to Overweight.

Credit neutral

Vattenfall

Q1 15 results were weak due to depressed Nordic and continental power prices. Nuclear and hydro generation was also down y/y. Vattenfall reports that its hedges, which used to ensure a relatively solid power price, are now running off, which depresses earnings. Sales fell 1% y/y, while comparable EBITDA fell 7% y/y. Vattenfall's net debt remained largely unchanged due to tempered capex. Despite weaker cash flow, Vattenfall's adjusted FFO to net debt was marginally better at 21% due to the inclusion of new hybrid on the balance sheet. Overall, these were slightly credit negative results from Vattenfall.

Credit negative

Atlas Copco

Like other Swedish industrials, Atlas Copco got a strong boost from the weaker SEK, which led revenues and order intake to increase by 16% and 12% y/y, respectively. Adjusting for the currency effect, both revenues and order intake declined organically. The key drag on Atlas’s results was weaker demand for equipment, which could not be fully offset by higher demand for services. The group continues to show very strong cash flow and overall reported net debt fell by around SEK1bn, resulting in a net debt to EBITDA ratio of 0.7x versus 0.8x in Q4 14. We maintain our Underweight rating.

Credit negative



10


Company news from the past week Name News Implication

Corem

Corem’s results were solid. Q1 rental income rose by 6% y/y and the NOI margin remained high at 75%. Financial derivatives weighed on the results by SEK80m in Q1, with the valuation change in Klövern shares making a positive contribution of SEK61m. The yield requirement revision from 7.4% at year-end 2014 to 7.3% in Q1 boosted valuation gains from properties by SEK71m. Gross loan-to-value (LTV) fell to 75%, from 77% at year-end, due to higher property values. The average maturity of the debt portfolio was 3.4 years and the fixed interest period was 4.6 years. The economic occupancy rate fell somewhat and was down to 90% (Q4 14 92%). All in all, there were no surprises. The Klövern shares continue to balance the negative effects of financial derivatives (long interest duration) and operating cash flow remains healthy. We see the results as credit neutral/on the margin positive due to the lower LTV.

Credit positive

Jernhusen

Jernhusen presented a stable and credit neutral Q1 report. Rental income increased by 7% y/y and net income increased by 98% following valuation changes in the property portfolio. LTV was slightly higher y/y at 52%, while net debt/EBITDA weakened somewhat. We note the zero amount of cash recognised on the balance sheet but the high amount of undrawn credit facilities has a calming effect from a credit perspective. We view Jernhusen as an 'A-' credit with stable outlook.

Credit neutral

Sparebank-1

Nord-Norge

After the writedown of half of the Russian exposure took most of the focus in Q4, the Q1 results were more in line with previous quarters and there were still no real signs of impaired asset quality following the lower oil price. We believe it is still early days for any implications to have an impact and continue to believe better value can be found elsewhere. We maintain our Underweight rating.

Credit positive

Sparebank-1 SR-

Bank

SpareBank 1 SR-Bank's Q1 results showed only a modest negative impact from the falling oil price and with an ROE of 12.7%, a cost-income ratio of 47.6% and a transitional CET1 ratio of 12.1%, the bank remained in fundamentally good shape. However, market conditions have changed in Norway, particularly in the core business area, which is also highlighted by the bank, and with this in mind, we see no reason to turn more positive on the name as of yet. We maintain our Underweight rating.

Credit positive

LKAB

LKAB's performance in Q1 continued to be negatively affected by the severe price decline for iron ore, which caused sales and earnings to fall heavily versus Q1 14. In this environment, LKAB continues to focus on cost reduction and cash preservation. Encouragingly, the company generated positive free cash flow in Q1, with a strong balance sheet with zero net debt. We maintain our view of LKAB as a 'BBB+' credit with stable outlook, including one notch of implicit ownership support. Our expectation for the current rating is that LKAB should maintain net debt to EBITDA of below 1.5x in coming years.

Credit negative

11



NCC

NCC reported good results for the seasonally weak Q1, with sales and operating income beating SME Direkt consensus. The Nordic construction market outlook continues to be fairly optimistic with the exception of Finland. Adjusted net debt to LTM EBITDA increased to 3.1x, from 2.5x at year-end 2014, as a result of an earlier dividend payout and increased pension liabilities. We expect credit metrics to recover over the next few quarters and consider the report to be credit neutral for NCC. We maintain our 'BBB-' rating and reiterate our stable outlook.

Credit neutral

Outokompu

Outokumpu's Q1 15 results were in line with the group's profit warning issued two weeks ago. The primary reason for the soft performance was the North American market, which saw price pressure on the back of higher imports and elevated inventory levels resulting from a low nickel price. Adjusted net debt rose by around EUR80m on negative CFO and a rise in pension liabilities but metrics improved on better LTM earnings. We maintain our 'B' rating on the name for now, as we see the turnaround story as intact (for now) and expect the weakness in North America to be offset by a stronger European market for the remainder of 2015

Credit negative

Nordea

Nordea reported high earnings for Q1 but solely due to trading income, which we normally perceive as lower quality because of its volatile nature. The more important NII line was weaker than SME Direkt consensus and capitalisation was hit by increasing REA (previously RWA). To us, this underlines that Nordea is more trading oriented than the market gives it credit for and, with this in mind, we continue to believe its bonds trade too tightly. We reiterate our Underweight rating.

Credit neutral

Wihlborgs

Wihlborgs delivered a stable performance in Q1, with modest growth in rental income and a slight decline in the loan-to-value ratio from the previous quarter. The company's credit profile benefits from its high-quality property portfolio, which is located in an attractive region with good growth characteristics. Due to its focus on commercial properties, rental income is exposed to swings in economic cycles, while earnings have a certain sensitivity to interest rate fluctuations. All in all, we continue to see Wihlborgs as a 'BB+' credit with stable outlook, with its bonds one notch lower at 'BB' due to structural subordination.

Credit neutral

Handelsbanken Handelsbanken reported strong Q1 numbers on all important lines (NII, fees and loan losses) and remains best in class. We maintain our Marketweight rating due to tight pricing. Credit positive

12



Fortum

Fortum's Q1 15 results were weighed down by depressed Nordic power prices and warm weather. Both comparable sales and earnings are down y/y. This is the first quarter that Fortum has reported without its divested distribution segment. A stronger cash flow due to reduced capex caused Fortum's current credit metrics to improve q/q. We expect these to improve further in Q2 when the large proceeds from the divested Swedish grid hit Fortum's balance sheet. Following this, Fortum's metrics are strong for its current ratings. However, ambitions towards releveraging make a downgrade a real possibility. Overall, we view this as a credit neutral report from Fortum but we maintain our Underweight rating due to risks in Russia and uncertainty about shareholder friendliness.

Credit neutral

Vsakronen

Vasakronan delivered another solid quarter, with an increase by 2% in rental income. Negative contributions in financial derivatives were balanced by a very strong valuation gain for the property portfolio. The group's financial position remains strong with a net loan-to-value ratio of 48%. The economic occupancy rate rose in Q1 and is now 92.2%. Lower capex levels and some disposals had a positive effect on cash flow. During Q1, dividends of SE924m were paid. We continue to view Vasakronan as an 'A-' credit, including two notches uplift for ownership support. The outlook remains stable.

Credit positive

Jyske Bank

The integration of BRF Kredit is on track and we believe the rationale for acquiring it will be fully visible in 2015. We maintain our Overweight rating, as the two outstanding liquid bonds offer an attractive pickup versus regional peer banks.

Credit neutral

Sydbank Sydbank's Q1 results were mixed, but capitalisation improved and equally importantly asset quality seemed very robust, with the bank continuing to buffer up. We maintain our Overweight rating. Credit neutral

Stena

Stena delivered decent Q4 14 results, with a healthy increase in EBITDA y/y. Debt metrics strengthened moderately in the quarter. Despite the moderately credit positive Q4 14 results, we see a risk of increased leverage and ratings pressure starting to build given the very tough outlook in the drilling segment. On the back of this, we see no reason to change our recommendation following the results. We expect the bonds to perform in line with the market.

Credit neutral

13




Statskraft

Statkraft's Q1 15 results were weak and in line with what we have seen from other Nordic utilities. A tumbling power price, partly offset by higher hydro power production, caused both revenues and earnings to deteriorate y/y. However, tempered capex coupled with a solid cash flow resulted in lower group net debt q/q. Subsequently, group adjusted credit metrics are unchanged sequentially, leaving Statkraft comfortably aligned with its current ratings from all agencies. Statkraft repeated its ambition to maintain its ratings and to adjust its capex in order to fulfil this ambition. We continue to see value in Statkraft's bonds as a safe-haven investment due to the proven support willingness from the Norwegian government. We maintain our Overweight recommendation.

Credit neutral

DNB Bank

DNB benefited from strong trading income in Q1, as did most of its Nordic peers, but also from lower-than-expected loan losses. The oil-related exposure seems to be well under control still but the question is whether this will continue. We think the jury is still out on to what extent the lower oil price will hit Norway and in tandem with DNB's increasing exposure to oil-related industries, we see no reason to change our negative view. We maintain our Underweight rating.

Credit neutral

Statoil

Statoil delivered weak Q1 15 results on the back of lower oil and gas prices. Both revenues and comparable earnings fell significantly. However, strong cost discipline left Statoil's earnings ahead of market expectations. During Q1, Statoil took a NOK46bn impairment on its US shale assets, reflecting lower profitability. Statoil's cash flow deteriorated significantly, lifting group net debt by 13% q/q. Following this, we now see adjusted FFO to net debt at 56% (63% in Q4 14). This is barely in line with S&P's short-term requirement and the risk of a downgrade is moving closer, in our view. Despite this, Statoil is still maintaining its quarterly dividend payout level of NOK5.7bn. Overall, this is a credit negative report and we maintain our Underweight rating due to the tight pricing of Statoil's bonds.

Credit negative

14




SCA

SCA's reported Q1 figures beat market expectations in terms of revenues while falling slightly short on EBIT as a result of higher raw material costs. Sales rose 15% y/y on the back of FX tailwinds, better prices and increased volumes. Credit metrics held stable and the SCA balance sheet is, in our view, commensurate with the current 'A-' rating from S&P and strong for the 'Baa1' rating from Moody's. We believe the current valuation is fair for the split rating and we maintain our Marketweight recommendation on the name

Credit positive

OP Financial

Group

OP Financial Group reported a strong set of figures across the board for Q1. The non-life operation benefited from benign weather conditions, while the banking operation reported low loan losses and increased lending volume despite the challenging macro conditions. This said, it was all overshadowed by the large increase in capitalisation, which we find very positive. We lift our rating from Underweight to Marketweight.

Credit positive

15

.


Selected new issues

Date Issuer Coupon CCY Volume Maturity S&P / Mdy / Fitch ASW/DM

29-04-2015 DONG Energy 3% EUR 600m 3015 282

28-04-2015 Cirsa Funding Luxembourg 5.875% EUR 500 m / (P)B3 /

09-10-2014 Infra Foch Sas 2.125% EUR 450 m Apr-25 BBB / / 100

05-01-2015 Rci Banque Sa EUR003M +45bps EUR 500 m Jan-17 BBB / Baa3 /*+ / 45

24-04-2015 Rapid Holding Gmbh 6.625% EUR 400 m Nov-20 / (P)B2 /

23-04-2015 Ineos Finance Plc 4% EUR 770 m May-23 BB- / Ba3 /

22-04-2015 Bhp Billiton Finance Ltd 1.5% EUR 750 m Apr-30 A+ / A1 / 85

22-04-2015 Bhp Billiton Finance Ltd EUR003M +35bps EUR 600 m Apr-20 A+ / A1 / 35

22-04-2015 Bhp Billiton Finance Ltd 0.75% EUR 650 m Oct-22 A+ / A1 / 50

16

Chart pack: euro spreads and returns Euro IG ASW, iBoxx indices

Source: Macrobond Financial, Danske Bank Markets [all charts]

Euro HY ASW, Merrill Lynch indices

IG Total Return, iBoxx indices, 2014-01=100

HY Total Return, Merrill Lynch indices, 2014-01=100

17

Chart pack: relative value iTraxx vs iBoxx

Source: Bloomberg, Macrobond Financial, Danske Bank Markets [all charts]

Euro vs US CDS indices - IG (Markit)

EUR CDS Spreads – Nordic Banks

Euro vs US HY bond indices (Merrill Lynch)

18

Chart pack: general market development European swap and government yields

Source: Macrobond, Danske Bank Markets [all charts]

Euro swap curve spread

3M TED-spread, US and euro area

EUR/USD basis swaps

19

Chart pack: fund flows Europe, net sales


Sweden, net sales

US, net sales

Norway, net sales

20

Chart pack: macro GDP y/y growth, calendar adjusted


Euro area y/y change in bank lending

Purchasing Manager Indices

Euro area lending standards

21

Our coverage and shadow ratings 1 of 5

Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings

Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookAhlstrom Oyj B+ Stable Mads RosendalAkelius Residential Property Ab BBB- Stable BBB- Louis LandemanAmbu A/S BBB- Stable Jakob MagnussenAp Moeller - Maersk A/S BBB+ Stable Baa1 Stable Brian Børsting MARKETWEIGHTArla Foods Amba BBB+ Stable Mads RosendalAtlas Copco Ab A Stable A2 Stable Mads Rosendal UNDERWEIGHTAvinor As AA- Stable A1 Stable Ola Heldal MARKETWEIGHTBank 1 Oslo Akershus As BBB+ Stable T. Hovard / L. HolmBank Norwegian As BBB Stable T. Hovard / L. HolmBeerenberg Holdco Ii As B Stable Øyvind MossigeBillerudkorsnas Ab BBB- Stable Mads RosendalBw Offshore BB+ Stable Øyvind MossigeCargotec Oyj BBB- Stable Mads RosendalCarlsberg Breweries A/S Baa2 Neg BBB Stable Brian Børsting MARKETWEIGHTCermaq Asa BB Stable Knut-Ivar BakkenCitycon Oyj BBB Stable Baa2 Stable Emil Hjalmarsson OVERWEIGHTColor Group As BB- Stable B+ Niklas RipaCom Hem Holding Ab BB- Stable Ola HeldalCorem Property Group Ab BB- Stable B+ Emil HjalmarssonDanfoss A/S BBB Stable Jakob MagnussenDanske Bank A/S A Neg A3 A StableDfds A/S BBB- Stable Niklas RipaDlg Finance As BB- Stable Mads RosendalDna Ltd BBB- Stable Ola HeldalDnb Bank Asa A+ Stable A1 T. Hovard / L. Holm UNDERWEIGHTDong Energy A/S BBB+ Stable Baa1 Stable BBB+ Stable Jakob Magnussen MARKETWEIGHTDsv A/S BBB Stable Brian BørstingEg Holding B Stable Jakob MagnussenEika Boligkreditt As A- Stable T. Hovard / L. HolmEika Gruppen As BBB Stable T. Hovard / L. HolmEksportfinans Asa BBB- Pos Ba3 Stable T. Hovard / L. HolmElectrolux Ab BBB Stable Wr WD Brian Børsting MARKETWEIGHT

Recomm.Danske Bank S&P Moody's Fitch

22



Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookElenia Oy Jakob Magnussen OVERWEIGHTElisa Oyj BBB+ Stable Baa2 Stable Ola Heldal OVERWEIGHTEntra Eiendom As A- Stable Ola HeldalFarstad Shipping Asa BB Neg BB- Øyvind MossigeFingrid Oyj A+ Stable A1 Stable A+ Stable Jakob Magnussen MARKETWEIGHTFinnair Oyj BB Stable Brian BørstingFortum Oyj A- A2 A- Neg Jakob Magnussen UNDERWEIGHTFortum Varme Holding Samagt Med Stockholms Stad Ab BBB+ Stable Jakob MagnussenFred Olsen Energy Asa BB Stable BB- Sondre StormyrG4S Plc BBB- Stable Brian Børsting OVERWEIGHTGetinge Ab BB+ Neg Louis LandemanGolden Close Maritime Corp Ltd B- Sondre StormyrHeimstaden Ab BB Stable BB- Louis LandemanHemso Fastighets Ab BBB+ Stable BBB A- Stable Emil HjalmarssonHkscan Oyj BB Stable Brian BørstingHoist Kredit Ab BB- Stable B+ Gabriel BerginHusqvarna Ab BBB- Pos Emil HjalmarssonIkano Bank Ab BBB Stable T. Hovard / L. HolmInvestor Ab AA- Stable A1 Stable Brian Børsting OVERWEIGHTIss A/S BBB- Pos Brian Børsting OVERWEIGHTJ Lauritzen A/S B Stable B- Bjørn Kristian RøedJernhusen Ab A- Stable Gabriel BerginJyske Bank A/S A- Stable Baa T. Hovard / L. Holm OVERWEIGHTKesko Oyj BBB Stable Mads RosendalKlaveness Ship Holding As BB- Stable B+ Bjørn Kristian RøedLoomis Ab BBB- Stable Brian BørstingLuossavaara-Kiirunavaara Ab BBB+ Stable Louis LandemanMeda Ab BB- Stable Louis LandemanMetsa Board Oyj BB Stable B1 Pos Mads RosendalMetso Oyj BBB Stable Baa2 Stable Mads Rosendal MARKETWEIGHTNcc Ab BBB- Stable Emil HjalmarssonNeste Oil Oyj BBB- Stable Jakob Magnussen OVERWEIGHTNokia Oyj BB+ Pos Ba2 Stable BB Pos Ola Heldal MARKETWEIGHT


23



Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookNokian Renkaat Oyj BBB+ Stable Jakob MagnussenNordax Finans Ab BBB- Stable T. Hovard / L. HolmNordea Bank Ab AA- Neg Aa3 AA- Stable T. Hovard / L. Holm UNDERWEIGHTNorth Atlantic Drilling Ltd BB- Neg B+ Sondre StormyrNorwegian Air Shuttle Asa BB- Neg B+ Brian BørstingNorwegian Property Asa BBB- Stable Ola HeldalNykredit Bank A/S A+ Neg Baa A Stable T. Hovard / L. Holm MARKETWEIGHTNynas Group B+ Stable B+ Jakob MagnussenOcean Yield Asa BB BB- Øyvind MossigeOdfjell Se B+ Stable B Bjørn Kristian RøedOlav Thon Eiendomsselskap Asa BBB+ Stable Ola HeldalOrava Residential Reit Plc B+ Stable B+ Mads RosendalOlympic Ship As B+ Stable B Øyvind MossigeOrkla Asa BBB+ Pos Ola HeldalOutokumpu Oyj B PosPohjola Bank Oyj AA- Neg Aa3 Stable A+

Mads RosendalStable T. Hovard / L. Holm MARKETWEIGHT

Posten Norge As A- Stable Ola HeldalPostnord Ab BBB+ Stable Gabriel BerginProsafe Se BB Stable Sondre StormyrRamirent Oyj BB+ Stable Brian BørstingSampo Oyj Baa2 Stable T. Hovard / L. Holm MARKETWEIGHTSandnes Sparebank BBB+ Stable T. Hovard / L. HolmSandvik Ab BBB Neg Mads Rosendal OVERWEIGHTSas Ab B- Stable Wr Stable Brian BørstingSbab Bank Ab A Neg A2 Stable T. Hovard / L. Holm MARKETWEIGHTScania Ab A- Stable Mads Rosendal MARKETWEIGHTSchibsted Asa BBB Stable Ola HeldalSeadrill Ltd BB Neg BB- Sondre StormyrSecuritas Ab BBB Stable Wr Brian Børsting MARKETWEIGHTSkandinaviska Enskilda Banken Ab A+ Neg A1 A+ Pos T. Hovard / L. Holm OVERWEIGHTSkanska Ab BBB+ Stable Emil HjalmarssonSkf Ab BBB+ Neg Baa1 Stable Mads Rosendal UNDERWEIGHT


24



Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookSognekraft As BBB Stable BBB Jakob MagnussenSolstad Offshore Asa BB- Stable B+ Øyvind MossigeSpar Nord Bank A/S BBB+ Stable T. Hovard / L. HolmSparebank 1 Boligkreditt As A- Stable Aaa T. Hovard / L. HolmSparebank 1 Nord Norge A2 A Stable T. Hovard / L. Holm UNDERWEIGHTSparebank 1 Smn A2 A- Stable T. Hovard / L. Holm MARKETWEIGHTSparebank 1 Sr-Bank Asa A2 A- Stable T. Hovard / L. Holm UNDERWEIGHTSponda Oyj BBB- Stable Emil HjalmarssonSsab Ab BB- Stable Mads RosendalSt1 Nordic Oy BB Stable Jakob MagnussenStatkraft Sf A- Stable Aaa Stable Jakob Magnussen OVERWEIGHTStatnett Sf A+ Stable Wr Stable Jakob Magnussen MARKETWEIGHTStatoil Asa AA- Stable Aa2 Stable Jakob Magnussen UNDERWEIGHTSteen & Strom As BBB+ Stable Ola HeldalStena Ab BB Stable B2 Stable Niklas Ripa MARKETWEIGHTStockmann Oyj Abp B+ Stable Mads RosendalStolt-Nielsen Ltd BB+ Stable BB Bjørn Kristian RøedStora Enso Oyj BB Stable Ba2 Stable WD Mads Rosendal MARKETWEIGHTStorebrand Bank Asa BBB+ Stable BBB+ Neg Nr T. Hovard / L. HolmStorebrand Livsforsikring As A- Neg Baa1 Stable T. Hovard / L. HolmSunnfjord Energi As BBB- Stable BBB- Jakob MagnussenSuomen Hypoteekkiyhdistys A- Stable T. Hovard / L. HolmSvensk Fastighetsfinansiering Ab BBB Stable Louis LandemanSvenska Cellulosa Ab Sca A- Stable Baa1 Stable Mads Rosendal MARKETWEIGHTSvenska Handelsbanken Ab AA- Neg Aa3 AA- Stable T. Hovard / L. Holm MARKETWEIGHTSwedavia Ab A- Stable Gabriel BerginSwedbank Ab A+ Neg A1 A+ Pos T. Hovard / L. Holm MARKETWEIGHTSwedish Match Ab BBB Stable Baa2 Stable Brian Børsting MARKETWEIGHTSydbank A/S Baa T. Hovard / L. Holm OVERWEIGHTSaab Ab BBB+ Stable Wr Emil HjalmarssonTallink Grupp As BB Stable BB- Niklas RipaTdc A/S BBB Neg Baa3 Stable BBB Neg Ola Heldal MARKETWEIGHT


25


Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets


Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookTeekay Offshore Partners Lp BB- Stable B+ Bjørn Kristian RøedTele2 Ab BBB Stable Ola HeldalTelefonaktiebolaget Lm Ericsson BBB+ Stable Baa1 Stable BBB+ Stable Ola Heldal MARKETWEIGHTTelenor Asa A Stable A3 Stable Ola Heldal MARKETWEIGHTTeliasonera Ab A- Stable A3 Neg A- Stable Ola Heldal UNDERWEIGHTTeollisuuden Voima Oyj BBB Neg Wr BBB Stable Jakob Magnussen OVERWEIGHTThon Holding As BBB+ Stable Ola HeldalTine Sa BBB+ Stable Ola HeldalUpm-Kymmene Oyj BB+ Stable Ba1 Stable WD Mads Rosendal MARKET WEIGHTVasakronan Ab A- Stable Emil HjalmarssonVattenfall Ab A- Stable A3 Stable A- Neg Jakob Magnussen MARKETWEIGHTVestas Wind Systems A/S BBB- Pos Niklas Ripa OVERWEIGHTVictoria Park Ab BB- Stable B+ Louis LandemanVolvo Ab BBB Neg Baa2 Neg BBB Stable Mads Rosendal MARKETWEIGHTWilh Wilhelmsen Asa BBB- Stable Bjørn Kristian RøedYit Oyj B Neg Emil Hjalmarsson


26

Fixed Income Credit Research team Thomas Hovard, Chief Analyst

Head of Credit Research +45 45 12 85 05 [email protected]

Louis Landeman, Senior Analyst

TMT, Industrials +46 8 568 80524 [email protected]

Mads Rosendal, Analyst

Industrials, Pulp & Paper +46 8 568 80594 [email protected]

Jakob Magnussen, Senior Analyst

Utilities, Energy +45 45 12 85 03 [email protected]

Knut-Ivar Bakken, Senior Analyst

Fish Farming +47 85 40 70 74 [email protected]

Brian Børsting, Senior Analyst

Industrials +45 45 12 85 19 [email protected]

Lars Holm, Senior Analyst

Financials +45 45 12 80 41 [email protected]

Gabriel Bergin, Analyst

Strategy, Industrials +46 8 568 80602 [email protected]

Niklas Ripa, Senior Analyst

High Yield, Industrials +45 45 12 80 47 [email protected]

Bjørn Kristian Røed, Senior Analyst

Shipping +47 85 40 70 72 [email protected]

Ola Heldal, Senior Analyst

TMT +47 85 40 84 33 [email protected]

Sondre Dale Stormyr, Senior Analyst

Offshore Rigs +47 85 40 70 70 [email protected]

Henrik René Andresen, Senior Analyst

Credit Portfolios +45 45 13 33 27 [email protected]

Øyvind Mossige, Senior Analyst

Oil Services +47 85 40 54 91 [email protected]

Emil Hjalmarsson, Analyst

Real Estate, Construction +46 8 568 80634 [email protected]
















27

Disclosures This research report has been prepared by Danske Bank Markets, a division of Danske Bank A/S (‘Danske Bank’). The author of this research report is Henrik René Andresen, 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 research analyst’s personal view about the financial instruments and issuers covered by the research report. Each responsible research analyst further 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.

Regulation

Danske Bank is authorised and subject to regulation by the Danish Financial Supervisory Authority and is subject to the rules and regulation of the relevant regulators in all other jurisdictions where it conducts business. Danske Bank is subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority (UK). Details on the extent of the regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from Danske Bank on request.

The research reports of Danske Bank are prepared in accordance with the Danish Society of Financial Analysts’ rules of ethics and the recommendations of the Danish Securities Dealers Association.

Conflicts of interest

Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high-quality research based on research objectivity and independence. These procedures are documented in Danske Bank’s research policies. Employees within Danske Bank’s Research Departments have been instructed that any request that might impair the objectivity and independence of research shall be referred to Research Management and the Compliance Department. Danske Bank’s Research Departments are organised independently from and do not report to other business areas within Danske Bank.

Research analysts are remunerated in part based on the overall profitability of Danske Bank, which includes investment banking revenues, but do not receive bonuses or other remuneration linked to specific corporate finance or debt capital transactions.

Danske Bank, its affiliates and subsidiaries are engaged in commercial banking, securities underwriting, dealing, trading, brokerage, investment management, investment banking, custody and other financial services activities, may be a lender to the companies mentioned in this publication and have whatever rights are available to a creditor under applicable law and the applicable loan and credit agreements. At any time, Danske Bank, its affiliates and subsidiaries may have credit or other information regarding the companies mentioned in this publication that is not available to or may not be used by the personnel responsible for the preparation of this report, which might affect the analysis and opinions expressed in this research report.

See http://www-2.danskebank.com/Link/researchdisclaimer for further disclosures and information.

http://www-2.danskebank.com/Link/researchdisclaimer



28

General disclaimer 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 form part of, and shall under no circumstances be considered as, an offer to sell or a solicitation of an offer to purchase or sell any relevant financial instruments (i.e. financial instruments mentioned herein or other financial instruments of any issuer mentioned herein and/or options, warrants, rights or other interests with respect to any such financial instruments) (‘Relevant Financial Instruments’).

The research report has been prepared independently and solely on the basis of publicly available information that Danske Bank considers to be reliable. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and Danske Bank, its affiliates and subsidiaries accept no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this research report.

The opinions expressed herein are the opinions of the research analysts responsible for the research report and reflect their judgement as of the date hereof. These opinions are subject to change, and Danske Bank does not undertake to notify any recipient of this research report of any such change nor of any other changes related to the information provided in this research report.

This research report is not intended for retail customers in the United Kingdom or the United States.

This research report is protected by copyright and is intended solely for the designated addressee. It may not be reproduced or distributed, in whole or in part, by any recipient for any purpose without Danske Bank’s prior written consent.

Disclaimer related to distribution in the United States This research report is distributed in the United States by Danske Markets Inc., a U.S. registered broker-dealer and subsidiary of Danske Bank, pursuant to SEC Rule 15a-6 and related interpretations issued by the U.S. Securities and Exchange Commission. The research report is intended for distribution in the United States solely to ‘U.S. institutional investors’ as defined in SEC Rule 15a-6. Danske Markets Inc. accepts responsibility for this research report in connection with distribution in the United States solely to ‘U.S. institutional investors’.

Danske Bank is not subject to U.S. rules with regard to the preparation of research reports and the independence of research analysts. In addition, the research analysts of Danske Bank who have prepared this research report are not registered or qualified as research analysts with the NYSE or FINRA but satisfy the applicable requirements of a non-U.S. jurisdiction.

Any U.S. investor recipient of this research report who wishes to purchase or sell any Relevant Financial Instrument may do so only by contacting Danske Markets Inc. directly and should be aware that investing in non-U.S. financial instruments may entail certain risks. Financial instruments of non-U.S. issuers may not be registered with the U.S. Securities and Exchange Commission and may not be subject to the reporting and auditing standards of the U.S. Securities and Exchange Commission.

Weekly Credit Update - Danske Bank · SBAB Bank AB EUR 2016 Nordea Bank AB EUR 2016 Pohjola Bank...

Documents

Transcript of Weekly Credit Update - Danske Bank · SBAB Bank AB EUR 2016 Nordea Bank AB EUR 2016 Pohjola Bank...