Weekly Credit Update19 December 2017

Investment Research

www.danskebank.com/CI

This document is intended for institutional investors and is not subject to all the independence and disclosure standards applicable to debt research

reports prepared for retail investors.

Niklas Ripa

Phone +45 4512 2847

niri@danskebank.com

Important disclosures and certifications are contained from page 23 of this report

What’s on our minds – general credit market view

2

*indices not adjusted for recent roll to S28

Source: Bloomberg data, Danske Bank DCM Research

*indices not adjusted for recent roll to S28

Source: Bloomberg data, Danske Bank DCM Research

Over the week, we saw sideways movement in the iTraxx Europe, which ended the

week around c.48bp (+1bp). The iTraxx Crossover drifted slightly wider (+5bp)

ending the week around 235bp.

The final details of the US tax overhaul were finally revealed on Friday. The

Republican tax plan cuts the corporate tax rate to 21% on a permanent basis,

while offering temporary cuts to individuals. According to the Joint Committee on

Taxation (JCT), the reform will raise economic growth of about 0.8% over the next

ten years. Although underfinanced, the plan could also boost US corporate

earnings by some 10% on average, with oil refiners, airlines and banks among the

main beneficiaries, according to Financial Times. If carried through, this reform

could create some tailwinds to especially the US equity and credit markets. On the

EUR side of the Ocean, we are set to witness whether the upcoming Catalan

election this week will create a ‘hung’ parliament with possible consequences for

the return of Euro area related ‘political’ risk. Such a scenario could create some

near-term EUR spread movement.

Over the past weeks, we have seen outflows in the European HY credit market and

gradually seen liquidity and new issuance activity become poorer. Investors seem

to be fine-tuning positions ahead of 2018. Last week, we launched our 2018

credit outlook. In short, we are positive, but not overly bullish on the European

credit market looking into 2018: Credit outlook 2018 - Slowly turning off the tap.

Yesterday, we launched a new trade idea to Buy Vestas 2022 Outright –

recommendation raised to Overweight from Marketweight”: see Trade idea - Buy

Vestas 22s.

We wish you a Merry Christmas and a Happy New Year. See you again in 2018!

iTraxx Main*

iTraxx Crossover*

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Latest EUR trade idea

3

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Relative value (EUR), indicative mid spreads Credit spread development

Source: Bloomberg, Danske Bank DCM Research Source: Bloomberg, Danske Bank DCM Research

Buy Vestas 2.75% 2022 outrightRecommendation raised from Marketweight to Overweight

Key arguments for the trade

• Vestas’s bonds widened in early November on the back of a weak Q3, which revealed that Vestas is not immune to the industry trend of increasing price and margin pressure. However, the bulk of the widening came from uncertainty about the US tax reform curbing support for US wind farms. These risks now seem significantly reduced.

• The past few days have shown that the accelerated termination of the Producer Tax Credit has been removed from the house’s tax bill proposal. The draft from the Senate also shows that the BEAT provision will have only limited impact on the tax-equity model for financing of wind projects. As such, the political US headwinds seem to have cooled of. This is not yet reflected in spread recovery.

• Margin pressure remains a current theme. However, this is more an equity story, as Vestas’s debt-servicing abilities remain entrenched in a solid FCF and the intrinsic value of its Service division.

• We expect some of Vestas’s peers to go under or be acquired. We do not see Vestas as a candidate for the former. This is due to the company’s leadership in terms of cost per megawatt, overall market share, R&D budget and due to Vestas’ low leverage (gross debt/EBITDA of 0.3x).

• We upgrade our recommendation from Marketweight to Overweight, expecting continued short-term regulatory support and believing that the margin story is overblown from a credit perspective.

• See Vestas Wind Systems – Q3 17: Weighed down by tougher

competition, we move to Marketweight, 9 November.

VWSDC 2.75% '22

Industrials BBB

Industrials BBB-

Industrials BB+

0

20

40

60

80

100

120

140

160

1 2 3 4 5 6 7 8 9 10 11 12

Ask Spread (EUR)*

YTW**

* Z-spreads. Discount margin for floaters. Swapped to indicated currency. ** Years-to-worstNote: Fair value curve(s) based on Danske Bank Markets' (mid) peer group of European issuers

0

20

40

60

80

100

120

140

160

Jan-2017 Mar-2017 May-2017 Jul-2017 Sep-2017 Nov-2017

ASW Issue Currency

VWSDC EUR 2.75% 2022 IBOXX EURO Industrials

Latest local currency trade idea

4

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Trade recommendations – open trades (EUR) 1 of 2

5

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance (1)

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Source: Bloomberg data, Danske Bank DCM Research

* HPR is P(t)/P(0)-1+C*(T), where P(t) is the BID price today, P(0) is the ASK price at initiation of the trade and C*(T) is the coupon returns without reinvestment

Source: Bloomberg pricing (pricing sources used [in order of priority] are DBCR, BGN, BVAL, CBBT and TRACE), Danske Bank DCM Research

Open date Type Trade FX Idea HPR*Z-Spread ∆

(bp)Benchmar

k ∆ (bp)Benchmark*

27-Nov-

2017Outright

Buy JYBC Tier 2 2.25% call

2024 (EUR)EUR

Jyske’s Tier 2 2.25% with call in 2024 has

underperformed EUR benchmark Tier 2s with call in

five years or more issued by other Scandi banks and

trades with a 25bp premium to the ‘Banks Tier 2 BBBs’

curve, leaving room for tightening, in our view.

-0.4% 7.27

13-Nov-

2017Outright

Buy LANSBK 0.5% 2022

(EUR)EUR

Länsförsäkringar Bank’s EUR senior unsecured bond

(rated ‘A (stable)’ by S&P and ‘A1 (stable)’ by Moody’s)

trades 14bp and 17bp wider than the EUR Financials

senior ‘A’ curve and EUR Financials senior ‘A+’ curve,

respectively.

-0.1% 4.50

3-Nov-2017 OutrightBuy Icelandic D-SIB banks’

EUR senior unsecuredEUR

Icelandic D-SIBs, Arion Banki, Landsbankinn and

Islandsbanki are all rated BBB+ with a stable outlook by

S&P and their EUR senior unsecured bonds offer

attractive pick ups to the EUR Financials senior BBB+

curve.

30-Oct-2017 Outright Buy Stora Enso 2027's EUR

We believe lowered capex needs for the next couple of

years could push Stora Enso to lower its leverage

ceiling and pave the way for an upgrade to Investment

grade.

0.8% -0.39 0.73IBOXX EURO

Industrials

25-Sep-

2017Outright Buy METSA 2027s in EUR EUR

The METSA 2027's offer solid carry relative to the

rating with upside potential from likely upgrade to

investment grade from S&P's

1.6% -4.28 -6.14IBOXX EURO

Industrials

11-Aug-

2017Switch

Buy DONGAS 3% call 2020

and fund by selling DONGAS

4.875% call 2018

EUR

The increasingly low short to medium term risk in

DONG Energy justifies taking on further duration. We

do, however, see longer-term risks, which is why we

prefer the medium term.

0.6% -14.44 -7.24IBOXX EURO

Utilities

24-Apr-

2017Outright

Buy ELENIA 2.875% '20

(EUR)EUR

The Elenia 2.875% 2020 is attractive compared to

Nordic utilities. Being ‘BBB’ rated, Elenia trades wider

than the ‘BBB-’ fair value curve

1.6% -23.20 -31.72IBOXX EURO

Utilities

3-Apr-2017 Switch

Switch to SANDSS 3.8%

'22 (EUR) from SANDSS

FRN '21 (SEK)

EUR

Switching to SANDSS 3.8% '22 (EUR) from SANDSS

FRN '21 (SEK), we estimate, based on indicative mid-

prices, that a spread pick-up around 40bp is possible to

receive

0.2% -14.21IBOXX EURO

Industrials

10-Mar-

2017Switch

Switch to NDASS 2% 21s

from NDASS 4% 20s EUR

NDASS ‘20s have clearly outperformed NDASS ‘21s.

Now is a good opportunity to take profit on the ‘20s and

pick up the ‘21s to maintain Nordea exposure.

0.0% -12.06

Trade recommendations – open trades (EUR) 2 of 2

6

Source: Bloomberg data, Danske Bank DCM Research

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance (2)

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

* HPR is P(t)/P(0)-1+C*(T), where P(t) is the BID price today, P(0) is the ASK price at initiation of the trade and C*(T) is the coupon returns without reinvestment

Source: Bloomberg pricing (pricing sources used [in order of priority] are DBCR, BGN, BVAL, CBBT and TRACE), Dankse Bank DCM Research

Open date Type Trade FX Idea HPR*Z-Spread

∆ (bp)Benchmark

∆ (bp)Benchmark*

23-Feb-2017 Outright Buy SCA Hygiene EUR SCHHYG 2025's trade on the 'BBB-' fair value curve 1.7% -15.51 -11.48

IBOXX

EURO

Consumer

Goods

9-Feb-2017 Outright Buy Vestas 2022s EUR

Vestas’ bonds are trading just tighter than the ‘BB+’ fair value curve, which leaves them with a substantial performance potential compared to the ‘BBB’ fair value curve.

1.8% -3.65 -16.27

IBOXX

EURO

Industrials

11-Nov-2016 OutrightBuy Sandvik EUR2022 and

EUR2026EUR

Trump could be the trigger for mining bonds. Combined with very attractive valuation of the Sandvik EUR 2022 and EUR 2026 bonds, we have become positive on the name.

4.6% -45.90 -36.97

IBOXX

EURO Non

Financials

BBB

11-Nov-2016 Outright Buy Metso EUR 2022 EUR

Trump could be the trigger for mining bonds. Combined with a very attractive valuation of the Metso EUR 2022 bond, we recommend to buy the bond.

0.7% -3.87 -36.97

IBOXX

EURO Non

Financials

BBB

31-Oct-2016 Outright Buy Outokumpu 2021 EUR

Outokumpu 2021 trade attractive compared to the fair value ‘B+’ EUR industrials curve and we expect further deleveraging.

6.5% -228.61 -33.41

25-Oct-2016 Outright Buy TVO EUR

TVO’s EUR curve trades attractive compared to the fair value ‘BB+’ industrials curve and its SEK curve offers a pick-up compared to the EUR curve

3.5% -46.58 -26.67

IBOXX

EURO

Utilities

3-Oct-2016 OutrightBuy Caruna 1.5% 2023

outrightEUR

Being ‘BBB+’ rated, Caruna trades between the ‘BBB-’ and the ‘BBB’ curve

0.5% -24.27 -27.53

IBOXX

EURO

Utilities

Trade recommendations – open trades (local currency) 1 of 2

7

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance (3)

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Source: Bloomberg data, Danske Bank DCM Research

* HPR is P(t)/P(0)-1+C*(T), where P(t) is the BID price today, P(0) is the ASK price at initiation of the trade and C*(T) is the coupon returns without reinvestment

Source: Bloomberg pricing (pricing sources used [in order of priority] are DBCR, BGN, BVAL, CBBT and TRACE), Danske Bank DCM Research

Open date Type Trade FX Idea HPR*Z-Spread

∆ (bp)Benchmar

k ∆ (bp)Benchmark*

1-Dec-2017 OutrightBuy EGASDK FRN 20s

(DKK)DKK

We believe that the price drop following the mishandling of the KY contract is overdone and see the impairment as a one-off. The recent tap of the bond underlines confidence in EG from its creditors and removes any liquidity concerns.

-0.9% 0.00IBOXX EURO

Industrials

17-Oct-2017 OutrightBuy Ship Finance 2019

bond in NOKNOK

Following the restructuring agreement with Seadrill and partial conversion of the 2018 convertible bond, the strong liquidity position could prompt even higher prices in the 2019 bond.

-0.2% 62.27 -4.21IBOXX EURO

Industrials

11-Oct-2017 OutrightBuy BW Offshore FRN

2020s in NOKNOK

BW Offshore's bonds maturing in 2020 are trading at spreads c.110bp wider than the two longer-dated bonds, and thus we expect a positive correction in BWO01 and BWO02 in the near term.

2.1% -46.60 -6.15IBOXX EURO

Industrials

5-Sep-2017 Switch

Switch from SBAB 0.5%

2021 in EUR to SBAB

0.9% 2022 in SEK

SEK

Switching from SBAB 0.5% 2021 in EUR to SBAB 0.9% 2022 in SEK, we estimate, based on indicative mid-prices, that a spread pick-up around 18bp is possible to receive.

-0.2% 4.27 -8.83IBOXX EURO

Industrials

5-Sep-2017 Switch

Switch from NDASS 0.3%

2022 in EUR to NDASS

0.15% 2020 in SEK

SEK

Switching from NDASS 0.3% 2022 in EUR to NDASS 0.15% 2020 in SEK, we estimate, based on indicative mid-prices, that a spread pick-up around 10bp is possible to receive. The switch also shortens the maturity by two years.

0.2% -1.18

5-Sep-2017 Switch

Switch from TELNO

4.125% 2020 EUR to

TELNO FRN 2019 in SEK

SEK

Switching from TELNO 4.125% 2020 EUR to TELNO FRN 2019 in SEK, we estimate, based on indicative mid-prices, that a spread pick-up around 20bp is possible to receive.

0.2% 2.02 -8.83IBOXX EURO

Industrials

5-Sep-2017 Switch

Switch from Telia 3.625%

2024 in EUR into 3.625%

2023 in SEK

SEK

Switching from Telia 3.625% 2024 in EUR into 3.625% 2023 in SEK, we estimate, based on indicative mid-prices, that a spread pick-up around 25bp is possible to receive.

1.9% -8.83IBOXX EURO

Industrials

5-Sep-2017 Switch

Switch from VATFAL EUR

hybrid (call 2027) to

VATFAL SEK hybrid (call

2022)

SEK

When pricing to the first call date, the switch from EUR toSEK lowers the spread slightly, but the SEK legcompensates well by shortening the maturity by five years.

-2.4% 25.49 -8.83IBOXX EURO

Industrials

16-Jun-2017 OutrightBuy Elekta FRN March

2022s in SEKSEK

Elekta's transformational programme is coming to an end and debt metrics have improved recently. We do not believe this is reflected in spreads at current levels and see tightening potential around 20bp to the SEK 'BBB-' curve.

6.9% -13.85IBOXX EURO

Industrials

Trade recommendations – open trades (local currency) 2 of 2

8

Selected investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance (4)

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

* HPR is P(t)/P(0)-1+C*(T), where P(t) is the BID price today, P(0) is the ASK price at initiation of the trade and C*(T) is the coupon returns without reinvestment

Source: Bloomberg pricing (pricing sources used [in order of priority] are DBCR, BGN, BVAL, CBBT and TRACE), Dankse Bank DCM Research

Open date Type Trade FX Idea HPR*Z-Spread ∆

(bp)Benchmar

k ∆ (bp)Benchmark*

17-May-2017 SwitchSwitch from Jefast 2021 to

Jefast 2019 in SEKSEK

We argue that Jefast's 2019 bond is trading too wide relative to the 2021 bond considering its shorter maturity and its secured status.

2.6% -13.42IBOXX EURO

Industrials

17-May-2017 OutrightBuy Victoria Park 2018s in

SEK SEK

We consider especially Victoria Park's shorter-dated bonds attractively priced compared to sector peers, with good tightening potential as the 2018 bond comes closer to maturity.

1.6% -13.42IBOXX EURO

Industrials

17-May-2017 OutrightBuy Castellum 2022s in

SEKSEK

We believe that Castellum's longer dated bonds trade wide relative to the company's credit quality and compared to peers in the SEK market..

6.5% -13.42IBOXX EURO

Industrials

9-May-2017 Switch

Switch to DSV 3.5% '22

(DKK) from DNFSDC

1.375% '22 (EUR)

DKK

The DSV 3.5% '22 (DKK) is attractively priced vs. the DNFSDC 1.375% '22 (EUR) even allowing for the lower liquidity and the unrated status of DSV

0.9% -13.96 -11.24IBOXX EURO

Industrials

3-Apr-2017 Switch

Switch to VLVY FRN '18

(SEK) from VLVY FRN '18

(EUR)

SEK

Switching to VLVY FRN '18 (SEK) from VLVY FRN '18 (EUR), we estimate, based on indicative mid-prices, that a spread pick-up around 22bp is possible to receive

0.0% -14.21IBOXX EURO

Industrials

3-Apr-2017 Switch

Switch to TVOYFH 3.9% '18

(SEK) from TVOYFH 4.6%

'19 (EUR)

SEK

Switching to TVOYFH 3.9% '18 (SEK) from TVOYFH 4.6% '19 (EUR), we estimate, based on indicative mid-prices, that a spread pick-up around 55bp is possible to receive.

0.1% -37.18 -14.21IBOXX EURO

Industrials

7-Feb-2017 OutrightBuy Kungsleden 2019s in

SEKSEK

Considering Kungsleden's ambition to strengthen its balance sheet, we think a repricing corresponding to around one credit notch is justified.

2.6% -88.33 -30.69

8-Nov-2016 OutrightBuy Castellum 2020s in

SEKSEK

Following the acquisition of Norrporten, Castellum has further strengthened its business risk profile.

2.7% -11.84IBOXX EURO

Industrials

21-Oct-2016 OutrightBuy Fastpartner 2018s in

SEKSEK

FastPartner’s bonds are still trading at generous spread levels and, in our opinion, the bonds should have potential for further tightening..

1.9% -10.89IBOXX EURO

Industrials

Source: Bloomberg data, Danske Bank DCM Research

Recent Nordic high yield/unrated issuance*

9

* Excluding increases in existing bond issues (taps)

Source: Bloomberg data, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Selected new issues (High yield/unrated)Date Issuer Coupon CCY Volume Maturity S&P / Mdy / Fitch ASW/DM

15/12/2017 Skandiabanken Ab 0.06% SEK 500 m Dec/19 / / -

15/12/2017 Castellum Ab STIB3M +145bps SEK 200 m Dec/22 / / -

14/12/2017 Norra Banhotellet Invest STIB3M +110bps SEK 1 400 m Dec/20 / / -

14/12/2017 Thon Holding As 1.1% NOK 100 m Jan/18 / / -

14/12/2017 Bn Bank Asa NIBOR3M +73bps NOK 200 m Dec/22 / / -

14/11/2017 Fana Sparebank NIBOR3M +48bps NOK 350 m Nov/20 / / -

08/12/2017 Newco Gb Sas 8% EUR 200 m Dec/22 / B3e / -

04/12/2017 Platin 1426 Gmbh 5.375% EUR 425 m Jun/23 (P)B / B3e / -

06/12/2017 Pvh Corp 3.125% EUR 600 m Dec/27 BB+ / Ba2 / -

07/12/2017 Pro-Gest Spa 3.25% EUR 250 m Dec/24 (P)BB- / (P)B2 / -

04/12/2017 Picard Bondco 5.5% EUR 310 m Nov/24 / (P)Caa1 / CCC+e -

28/10/2016 Crystal Almond Sarl 10% EUR 345 m Nov/21 / / -

29/11/2017 Lysaker Park Holding 5.5% NOK 223 m Dec/21 / / -

01/12/2017 Future Gaming Group Int 9.75% SEK 140 m Dec/20 / / -

01/12/2017 Glx Holding As NIBOR3M +525bps NOK 1 350 m Dec/23 / / 525

29/11/2017 Stockmann Oyj Abp 4.75% EUR 250 m Jan/22 / / -

29/11/2017 Lifco Ab 0.355% SEK 835 m Dec/19 / / -

14/11/2017 Klovern Ab STIB3M +170bps SEK 850 m Nov/21 / / 170

17/11/2017 Sas Ab 5.375% SEK 1 500 m Nov/22 B+ / B1 / -

17/11/2017 Volvo Car Ab 2% EUR 500 m Jan/25 BB+ / Ba2 / -

10/11/2017 Containerships Ltd EUR003M +625bps EUR 60 m Nov/21 / / 625

02/11/2017 Volvofinans Bank Ab 1.14% SEK 400 m Nov/22 / / -

01/11/2017 Sparebank 1 Bv NIBOR3M +150bps NOK 250 m Nov/27 / / 150

Selected new investment grade issues*

10

* Excluding increases in existing bond issues

Source: Bloomberg data, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Selected new issues (Investment Grade)

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

18/12/2017 Credit Agricole Sa 1.2% EUR 300 m Dec/27 A / / A+ -

14/12/2017 Volvo Treasury Ab 0.39% SEK 400 m Dec/20 BBB+ / Baa1 / -

14/12/2017 Volvo Treasury Ab 0.09% SEK 300 m Dec/19 BBB+ / Baa1 / -

12/12/2017 Nordic Investment Bank 1.375% NOK 1 250 m Jun/23 AAA / Aaa / -

12/12/2017 Nordic Investment Bank 1.375% NOK 1 250 m Jun/23 AAA / Aaa / -

13/12/2017 Unicredit Spa 5.375% EUR 1 000 m #VALUE! BBB / / B+e -

13/12/2017 Citycon Treasury Bv 1.17% NOK 350 m Mar/18 / Baa1 / -

11/12/2017 Societe Generale Sfh 0% EUR 1 000 m Dec/18 / Aaa / AAAe -

11/12/2017 Societe Generale Sfh 1.01% EUR 1 000 m Dec/28 / Aaa / AAAe -

08/12/2017 Akademiska Hus 2.31% SEK 250 m Dec/37 AA / / -

08/12/2017 Nortura Sa 1.25% NOK 200 m Dec/18 / / -

07/12/2017 Schneider Electric Se 0.875% EUR 750 m Dec/26 A- / Baa1 / WD -

27/11/2017 Willhem Ab 2.86% NOK 750 m Dec/27 A- / / -

07/12/2017 Omv Ag 1% EUR 1 000 m Dec/26 / Baa1 / A-e -

23/11/2017 Cgnpc International Ltd 1.625% EUR 500 m Dec/24 / A3e / A+ /*- -

30/11/2017 Yara International Asa STIB3M +100bps SEK 450 m Dec/22 BBB / Baa2 / 100

30/11/2017 Yara International Asa NIBOR3M +75bps NOK 1 250 m Dec/22 BBB / Baa2 / 75

30/11/2017 Yara International Asa 1.1% SEK 800 m Dec/22 BBB / Baa2 / -

30/11/2017 Yara International Asa 2.45% NOK 1 000 m Dec/24 BBB / Baa2 / -

30/11/2017 Yara International Asa 2.9% NOK 1 000 m Dec/27 BBB / Baa2 / -

28/11/2017 Johnson Controls Intl Pl 0% EUR 750 m Dec/20 BBB+ / Baa1e / BBB+ 23

27/11/2017 Volvo Treasury Ab 0.35% SEK 1 350 m Dec/20 BBB+ / Baa1 / -

16/11/2017 Bnp Paribas 1.5% EUR 1 000 m May/28 A- / Baa1 / A+ -

14/11/2017 Danske Bank A/S 0.75% EUR 500 m Nov/27 AAA / / AAA -5

16/11/2017 Orsted A/S 2.25% EUR 500 m Nov/17 BB+ / Baa3 / BBB- 190

16/11/2017 Orsted A/S 1.5% EUR 750 m Nov/29 BBB+ / Baa1 / BBB+ -

16/11/2017 Fingrid Oyj 1.125% EUR 100 m Nov/27 AA- / A1 / AA- 35

16/11/2017 Islandsbanki STIB3M +200bps SEK 750 m Nov/27 BBB- / / BBB 200

13/11/2017 Bank Norwegian As STIB3M +108bps SEK 500 m Nov/20 BBB / / 108

Fund flow update

Europe, net sales US, net sales

11

Norway, net sales

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Sweden, net sales

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Euro spreads and returns

Euro IG ASW, iBoxx indices IG total return, iBoxx indices

12

EURO HY total return, Merrill Lynch indicesEuro HY ASW, Merrill Lynch indices

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

EUR/USD relative value

iTraxx vs iBoxx Nordic Bank CDS spreads

13

EUR vs US HY bonds indicesEURO vs US CDS indices – IG (Markit)

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Swaps and government spreads

EU government bond yields 3M Libor

14

EUR/USD basis swaps

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

EUR 10Y vs 2Y swap

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Macroeconomic environment

GDP y/y, calendar adjusted Quarterly PMIs

15

Euro area lending standards

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Euro area y/y change in bank lending

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Basis spreads - Cash vs CDS

Sub financials cash vs CDS Senior financials cash vs CDS

16

iTraxx main vs iBoxx non-financials BBB

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

Source: Bloomberg data, Danske Bank DCM Research

iTraxx main vs iBoxx non-financials A

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview

Latest local currency trade idea

Latest EUR trade idea

Coverage overview 1 of 5

17

Source: Standard & Poor’s, Moody’s, Fitch, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview (1)

Latest local currency trade idea

Latest EUR trade idea

Ratings from S&P/Moody's/Fitch

Sector Analyst(s)

Company Rating Outlook Rating Outlook Rating OutlookA. P. Moller - Maersk BBB NO Baa2 NO NR NR Transportation Brian Børsting MarketweightAkelius Residential Ab BBB- PO NR NR NR NR Real estate Louis Landeman OverweightAktia Bank Plc A- S A3 PO Financials Katrine Jensen MarketweightAmbu NR NR NR NR NR NR Healthcare Jakob Magnussen OverweightArion Bank BBB+ S Financials Jesper Damkjaer OverweightArla Foods Amba Consumer goods Gabriel Bergin MarketweightAtlas Copco A S A2 S A S Machinery & heavy industrials Brian Børsting UnderweightAvinor As AA- NO A1 S NR NR Transportation Brian Børsting MarketweightBalder BBB S Baa3 PO NR NR Real estate Louis Landeman MarketweightBeerenberg Holdco Ii As NR NR NR NR NR NR Energy Haseeb Syed MarketweightBillerudkorsnäs Materials Mads Rosendal MarketweightBonheur NR NR NR NR NR NR Energy Bendik Engebretsen MarketweightBw Offshore NR NR NR NR NR NR Energy Bendik Engebretsen OverweightCabonline NR NR NR Services & IT August Moberg MarketweightCarlsberg NR NR Baa2 S BBB S Consumer goods Brian Børsting MarketweightCaruna BBB+ S Utilities Jakob Magnussen OverweightCastellum NR NR NR NR NR NR Real estate Louis Landeman MarketweightCitycon BBB S Baa1 S NR NR Real estate Louis Landeman MarketweightColor Group As NR NR NR NR NR NR Transportation Brian Børsting OverweightCom Hem BB PO NR NR NR NR TMT Mads Rosendal OverweightCorem NR NR NR NR NR NR Real estate Louis Landeman MarketweightCrayon Group NR NR NR NR NR NR Services & IT Haseeb Syed MarketweightDanfoss A/S BBB S NR NR NR NR Machinery & heavy industrials Brian Børsting MarketweightDfds NR NR NR NR NR NR Transportation Brian Børsting OverweightDlg Finance As Consumer goods Mads Rosendal MarketweightDlr Kredit A/S A- S WR NR Financials Katrine Jensen OverweightDna Ltd TMT Mads Rosendal OverweightDnb A+ S Aa2 NO NR NR Financials Katrine Jensen UnderweightDsv NR NR NR NR NR NR Transportation Brian Børsting OverweightEg Holding NR NR NR NR NR NR Services & IT Jakob Magnussen OverweightEika Forsikring As Financials Katrine Jensen MarketweightElectrolux A- S NR NR Consumer goods August Moberg Marketweight

Recomm.S&P Moody's Fitch

Coverage overview 2 of 5

18

Source: Standard & Poor’s, Moody’s, Fitch, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview (2)

Latest local currency trade idea

Latest EUR trade idea

Ratings from S&P/Moody's/Fitch

Sector Analyst(s)

Company Rating Outlook Rating Outlook Rating OutlookElekta NR NR NR Healthcare August Moberg OverweightElenia Oy BBB S Utilities Jakob Magnussen OverweightElisa BBB+ S Baa2 S TMT Mads Rosendal OverweightEllevio BBB S NR NR NR NR Utilities Jakob Magnussen OverweightEntra Real estate Haseeb Syed MarketweightEsb A- S A3 S A- S Utilities Jakob Magnussen MarketweightEssity BBB+ S Baa1 NO Mads Rosendal OverweightFaroe Petroleum NR NR NR NR NR NR Energy David Boyle MarketweightFastpartner NR NR NR NR NR NR Real estate Louis Landeman OverweightFelleskjopet Agri Sa Consumer goods Brian Børsting MarketweightFingrid Oyj AA- S A1 (unsolicited)PO A+ S Utilities Jakob Magnussen OverweightFinnair NR NR NR NR NR NR Transportation Brian Børsting MarketweightFortum BBB+ NW Baa1 (unsolicited)NW BBB+ NW Utilities Jakob Magnussen UnderweightFortum Värme BBB+ S NR NR NR NR Utilities Jakob Magnussen MarketweightG4S BBB- NO NR NR NR NR Services & IT Brian Børsting MarketweightGas Networks Ireland A S A3 S NR NR Utilities Jakob Magnussen MarketweightGetinge NR NR NR Healthcare August Moberg MarketweightGlamox NR NR NR NR NR NR Materials Haseeb Syed MarketweightHeimstaden Ab NR NR NR NR NR NR Real estate Louis Landeman MarketweightHemfosa Fastigheter Ab NR NR NR NR NR NR Real estate Louis Landeman UnderweightHexagon NR NR NR Machinery & heavy industrials August Moberg OverweightHkscan NR NR NR NR NR NR Consumer goods Mads Rosendal MarketweightHoist Finance NR NR Baa3 S NR NR Financials Jesper Damkjaer MarketweightHusqvarna BBB NR NR NR Consumer goods August Moberg MarketweightIf P&C Insurance Holding Ltd A- S NR NR NR NR Financials Katrine Jensen MarketweightIkano Bank Ab Financials Katrine Jensen MarketweightInvestor AA- S Aa3 S NR NR Financials Gabriel Bergin MarketweightIslandsbanki BBB PO BBB S Financials Jesper Damkjaer OverweightIss BBB S Baa2 S NR NR Services & IT Brian Børsting MarketweightJefast NR NR NR NR NR NR Real estate Louis Landeman MarketweightJernhusen Ab A S NR NR NR NR Real estate Louis Landeman MarketweightJyske Bank A- S Baa1 (unsolicited)S NR NR Financials Katrine Jensen OverweightKemira Materials Mads Rosendal Marketweight

Recomm.S&P Moody's Fitch

Coverage overview 3 of 5

19

Source: Standard & Poor’s, Moody’s, Fitch, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview (3)

Latest local currency trade idea

Latest EUR trade idea

Ratings from S&P/Moody's/Fitch

Sector Analyst(s)

Company Rating Outlook Rating Outlook Rating OutlookKesko NR NR NR NR NR NR Consumer goods Gabriel Bergin OverweightKlövern NR S NR S NR NR Real estate Louis Landeman MarketweightKojamo Oyj NR S Baa2 S NR NR Real estate Christopher HellesnesOverweightKungsleden NR NR Ba1 PO NR NR Real estate Louis Landeman MarketweightLandsbankinn BBB+ S Financials Jesper Damkjaer OverweightLänsförsäkringar Bank Ab A S A1 S NR NR Financials Katrine Jensen MarketweightLantmännen NR NR NR NR NR NR Consumer goods August Moberg MarketweightLink Mobility NR NR NR NR NR NR Services & IT Haseeb Syed MarketweightLoomis NR NR NR NR NR NR Services & IT Brian Børsting MarketweightLuossavaara-Kiirunavaara Ab NR NR NR NR NR NR Materials Louis Landeman OverweightMetsä Board BB+ PO Ba1 S Materials Mads Rosendal OverweightMetso BBB S NR NR NR NR Machinery & heavy industrials Brian Børsting OverweightNcc NR NR NR Construction August Moberg MarketweightNeste NR NR NR NR NR NR Energy Jakob Magnussen MarketweightNibe NR NR NR Machinery & heavy industrials August Moberg MarketweightNokia BB+ S Ba1 S BB+ PO TMT Mads Rosendal UnderweightNordax Bank NR NR NR NR NR NR Financials Jesper Damkjaer OverweightNordea AA- S Aa3 S AA- S Financials Jesper Damkjaer MarketweightNorgesgruppen NR NR NR NR NR NR Consumer goods Haseeb Syed MarketweightNorwegian Air Shuttle NR NR NR NR NR NR Transportation Brian Børsting MarketweightNorwegian Property Asa NR NR NR NR NR NR Real estate Haseeb Syed MarketweightNykredit Bank A/S A S Baa1 (unsolicited)S A S Financials Katrine Jensen MarketweightNynas Group NR NR NR NR NR NR Materials Jakob Magnussen UnderweightObos Bbl Real estate Haseeb Syed MarketweightObos Forretningsbygg NR NR NR NR NR NR Real estate Haseeb Syed MarketweightOlav Thon Eiendomsselskap Real estate Haseeb Syed OverweightOp Corporate Bank Plc AA- S Aa3 S NR NR Financials Katrine Jensen OverweightOrkla NR NR NR NR NR NR Consumer goods Haseeb Syed MarketweightØrsted BBB+ S Baa1 S BBB+ S Energy Jakob Magnussen MarketweightOutokumpu B2 PO Materials Mads Rosendal MarketweightPostnord Ab NR NR NR NR NR NR Transportation Louis Landeman Marketweight

Recomm.S&P Moody's Fitch

Coverage overview 4 of 5

20

Source: Standard & Poor’s, Moody’s, Fitch, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview (4)

Latest local currency trade idea

Latest EUR trade idea

Ratings from S&P/Moody's/Fitch

Sector Analyst(s)

Company Rating Outlook Rating Outlook Rating OutlookRemove BBB+ S Baa1 S BBB+ S Utilities Jakob Magnussen MarketweightSaab NR NR NR Machinery & heavy industrials August Moberg OverweightSandvik BBB PO NR NR NR NR Machinery & heavy industrials Brian Børsting OverweightSas Group B+ S B1 S NR NR Transportation Brian Børsting OverweightSato Oyj NR NR Baa3 S NR NR Real estate Louis Landeman MarketweightSbab Bank Ab A NO A2 PO NR NR Financials Katrine Jensen MarketweightSchibsted NR NR NR NR NR NR TMT Haseeb Syed MarketweightSeb A+ S Aa3 S AA- S Financials Katrine Jensen MarketweightSecuritas BBB S NR NR NR NR Services & IT Brian Børsting MarketweightShip Finance International NR NR NR NR NR NR Shipping Haseeb Syed OverweightSkf BBB- S Baa2 S NR NR Machinery & heavy industrials Brian Børsting UnderweightSpar Nord WR Financials Katrine Jensen MarketweightSparebank 1 Nord Norge NR NR A1 S A S Financials Katrine Jensen MarketweightSparebank 1 Smn NR NR A1 NO A- S Financials Katrine Jensen MarketweightSparebank 1 Sr-Bank NR NR A1 NO A- S Financials Katrine Jensen UnderweightSrv Group Oyj NR NR NR Construction August Moberg MarketweightSsab B+ PO Machinery & heavy industrials Mads Rosendal OverweightSt1 Nordic Oy NR NR NR NR NR NR Energy Jakob Magnussen MarketweightStatkraft Sf A- S Baa1 S BBB+ S Utilities Jakob Magnussen OverweightStatnett Sf A+ S A2 S NR NR Utilities Jakob Magnussen MarketweightStatoil A+ S Aa3 S NR NR Energy Jakob Magnussen UnderweightSteen & Strom As Real estate Haseeb Syed OverweightStena Ab BB- NO B1 S NR NR Transportation Brian Børsting UnderweightStockmann NR NR NR NR NR NR Consumer goods Mads Rosendal MarketweightStora Enso BB+ S Ba2 PO NR NR Materials Mads Rosendal OverweightStorebrand Livsforsikring BBB+ S Baa1 S Financials Katrine Jensen MarketweightSvenska Cellulosa Ab BBB+ S Baa1 NO Consumer goods Mads Rosendal OverweightSvenska Handelsbanken AA- S Aa2 S AA S Financials Katrine Jensen MarketweightSwedavia Ab NR NR NR NR NR NR Transportation Louis Landeman MarketweightSwedbank AA- NO Aa3 S AA- S Financials Katrine Jensen MarketweightSwedish Match BBB S Baa2 S NR Consumer goods August Moberg OverweightSydbank NR NR Baa1 PO NR NR Financials Katrine Jensen Overweight

Recomm.S&P Moody's Fitch

Coverage overview 5 of 5

21

Source: Standard & Poor’s, Moody’s, Fitch, Danske Bank DCM Research

Selected Investment grade issuance

Fund flow update

EUR spreads and returns

EUR/USD relative value

Swaps and government spreads

Running trade ideas and performance

Recent Nordic HY/unrated issuance

Macroeconomic climate

General market view

Basis spreads (cash vs. CDS)

Coverage overview (5)

Latest local currency trade idea

Latest EUR trade idea

Ratings from S&P/Moody's/Fitch

Sector Analyst(s)

Company Rating Outlook Rating Outlook Rating OutlookTdc BBB- S Baa3 S BBB- S TMT Mads Rosendal MarketweightTechnopolis NR NR NR NR NR NR Real estate Louis Landeman MarketweightTeekay Offshore Partners Lp NR NR NR NR NR NR Energy Bendik Engebretsen MarketweightTeekay Shuttle Tankers NR NR NR NR NR NR Shipping Bendik Engebretsen MarketweightTele2 TMT Mads Rosendal OverweightTelefonaktiebolaget Lm Ericsson BB+ S Ba2 NO BBB- NO TMT Mads Rosendal MarketweightTelenor A S A3 S NR NR TMT Mads Rosendal MarketweightTelia A- NO Baa1 S A- S TMT Mads Rosendal OverweightTeollisuuden Voima Oyj BB+ NW NR NR BBB- S Utilities Jakob Magnussen OverweightThon Holding As Real estate Haseeb Syed OverweightTopdanmark Financials Jesper Damkjaer Tresu Machinery & heavy industrials Mads Rosendal OverweightTryg Forsikring A/S NR NR S Financials Katrine Jensen MarketweightUpm-Kymmene BBB- PO Baa3 S WR NR Materials Mads Rosendal OverweightVasakronan Ab NR NR NR NR NR NR Real estate Louis Landeman MarketweightVattenfall BBB+ S A3 S BBB+ S Utilities Jakob Magnussen MarketweightVestas Wind Systems NR NR NR NR NR NR Machinery & heavy industrials Jakob Magnussen OverweightVictoria Park NR NR NR NR NR NR Real estate Louis Landeman OverweightVolvo BBB+ S Baa1 S BBB S Machinery & heavy industrials August Moberg MarketweightWallenius Wilhelmsen Logistics NR NR NR NR NR NR Transportation Brian Børsting OverweightWihlborgs NR NR NR NR NR NR Real estate Louis Landeman UnderweightYit NR NR NR Construction August Moberg OverweightAker Bp BB+ S Ba2 S NR NR Energy David Boyle MarketweightGlamox NR NR NR NR NR NR Materials Haseeb Syed Marketweight

Recomm.S&P Moody's Fitch

2222

18/12/2017

Fixed Income Credit Research team

Find the latest Credit Research: :

Danske Bank DCM Research: http://www.danskebank.com/danskemarketsresearch Bloomberg: DNSK<GO>

Thomas Hovard

Head of Credit Research

+45 45 12 85 05

hova@danskebank.com

Gabriel Bergin

Strategy, Financials

+46 8 568 80602

gabe@danskebank.com

Jakob Magnussen

Utilities, Energy

+45 45 12 85 03

jakja@danskebank.com

Henrik René Andresen

Credit Portfolios

+45 45 13 33 27

hena@danskebank.com

Bendik Engebretsen

Industrials & Norwegian HY

+47 85 40 69 14

bee@danskebank.com

Brian Børsting

Industrials

+45 45 12 85 19

brbr@danskebank.com

David Boyle

Industrials & Norwegian HY

+47 85 40 54 17

dboy@danskebank.com

Niklas Ripa

Credit Portfolios

+45 45 12 80 47

niri@danskebank.com

Louis Landeman

Industrials, Real Estate

+46 8 568 80524

llan@danskebank.com

Mads Rosendal

Industrials, TMT

+45 45 14 88 79

madro@danskebank.com

August Moberg

Industrials & Construction

+46 8 568 80593

aumo@danskebank.com

Jesper Damkjær

Financials

+45 45 12 80 41

damk@danskebank.com

Haseeb Syed

Industrials & Norwegian HY

+47 85 40 54 19

hsy@danskebank.com

Katrine Jensen

Financials

+45 45 12 80 56

katri@danskebank.com

Christopher Hellesnes

General Industrials

+46 8 568 80547

cahe@danskebank.se

23

DisclosuresThis research report has been prepared by Danske Bank DCM Research, a division of Danske Bank A/S (‘Danske Bank’). The author of this research report is Niklas Ripa, Analyst.

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Investment recommendations disseminated in the preceding 12-month period

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Report completed: 18 December 2017 at 15:47 CET

Report disseminated: 19 December 2017 at 07:00 CET