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Weekly Credit Update
15 September 2015
Analyst
Henrik René Andresen
+45 45 13 33 27
[email protected]
Investment Research
www.danskebank.com/CI
Important disclosures and certifications are contained from page 33 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 mind
- General credit market news
• Last week the European credit market moved more or less
sideways. iTraxx Main was unchanged at 71bp, while iTraxx
Crossover widened marginally to 329bp.
• Thursday was one of the busiest day on the European corporate
issue front this year with a total issuance volume of more than
EUR7.4bn according to Bloomberg. We saw prints from
amongst others Apple and Shell. Also Energais de Portugal
(EDP) came to the market with a corporate hybrid bond of
EUR750m (NC 5.5) and with a issue spread of approximately
545bp.
• In the Nordic region we saw issuances from the Finnish real
estate company CityCon Oyj with a 7-year EUR300m senior
unsecured bond printing at MS+175bp. Danske Bank came
with a 5 year USD1bn senior unsecured bond printing at 5-year
US Treasury+125 bp. AB Fortum Värme printed a total of
SEK2bn of senior unsecured bonds.
• The main event this week is the FOMC meeting on Thursday.
We believe the current uncertainty will stop the Fed from hiking
at this meeting but that Fed chairman Janet Yellen will signal
that a hike is coming later this year if global developments do
not push the US economy off course.
Sources: Bloomberg, Danske Bank Markets (both charts)
3
Scandi High Yield
4
Close of relative value trade in Tallink NOK 2018s
(published on 8 September 2015)
– Take profit in the Tallink FRN NOK 2018 following spread tightening
Global median ASW measured in NOK vs selected Nordic NOK 'ferry' bonds. (ASK)
•
Following credit-positive quarterly results, we
continue to view the credit profile of Tallink’s
bond as commensurate with a ‘BB-’ shadow
rating on a senior unsecured basis.
•
The senior unsecured Tallink 2018 performed
some 30bp of spread tightening since this
trade was initiated on 27 February 2015 and
has delivered a total NOK-based period return
in the area of some 4.1% (annualised total
return 7.9%).
•
Tallink 2018 is currently priced some 16bp
tighter than a global ‘BB-’ credit curve and
87bp tighter than an indicative Nordic `BB`curve, which seems rather a tight level to us.
•
We do not find this price level attractive for
new investors in the name despite the recently
strengthened credit profile and recommend
existing investors to take profit on the earlier
initiated trade. We close the trade.
•
We highlight the limited liquidity in the bond
issue from time to time.
Indicative DBDK DM to 3M Nibor (bp), ASK-spreads
600
550
500
COLLIN '19
(NR/NR/B+)
450
400
TALLNK '18
(NR/NR/BB-)
350
Nordic `BB-`
Moody´s `BB-`
300
Moody's 'BB'
COLLIN '16
(NR/NR/B+)
250
200
COLLIN '15
(NR/NR/B+)
150
DFDSDC '18
(NR/NR/BBB-)
100
DFDSDC '16
(NR/NR/BBB-)
50
Years to maturity
0
0
1
2
Source: Bloomberg, Moody’s, Danske Bank Markets
3
4
5
6
See Close of Trade in Tallink NOK 2018s, 8
September and Credit Update – Tallink Q2 15 –
Deleveraging continues for now, 13 August.
5
Recent trade ideas (high yield)
Recent ideas
Type
Outright
Trade
Idea
Close of Trade Tallink NOK 2018. Bonds trade tight to `BB-`curve and bonds no longer
Currency trade
Sell SSAB 2019 (SEK) and BUY
SSAB 2019 (EUR)
The spread between the SSAB 2019 (SEK) and SSAB
(EUR) 2019 is too wide
Outright
Buy Volvo 2075 Hybrid
Outright
Buy Akelius Residential 2019 in
SEK
The Volvo 4.2% 2075 Hybrid currently trades at
attractive levels, in our view, with a pick-up of around 2025bp to the rating implied spread.
The Akelius Residential SEK 2019 FRN 3M
Stibor+240bps trades wide relative to other similar
unrated SEK bonds.
Recent performance in the SSAB EUR bond has closed
the earlier 19bps gap between the EUR and the SEK
2019 bonds.
FRN Tallink 2018 in NOK trades cheap to a global
median ‘BB-’ credit curve (converted into NOK).
attractive. We take profit on trade initiated 27 February
2015 (TR: 3.9% / ann. TR 7.9%).
Opened
Start spread
Opened
Start spread
Currency trade
Close of trade SSAB
Outright
Buy Tallink 2018.
Outright
EGASDK '20
EGASDK '20's, which we see as 'B' indicatively trade way
too cheap relative to the industrial 'B' curve
Outright
SASSS '17
We believe the SAS 2017 offers an attractive absolute
value – supported by adequate liquidity
Opened
Start spread
Opened
Start spread
Opened
Start spread
Opened
Start spread
08 Sep 2015
440
20 Aug 2015
37
16 Jun 2015
347
13 Apr 2015
225
10 Mar 2015
-2
27 Feb 2015
470
Opened
02 Feb 2015
Start spread
Opened
Start spread
627
18 Dec 2014
807
Source: Danske Bank Markets
See the end of this presentation for a list of our coverage including shadow ratings and recommendations
6
Best and worst performers (Nordic coverage universe)
- High yield
1 month in local currencies
-160
Beerenberg Holdco II AS NOK 2018
SAS AB SEK 2017
-136
Prosafe SE NOK 2016
-8
Hoist Kredit AB EUR 2017
-119
Hoist Kredit AB SEK 2016
-5
Stockmann OYJ Abp EUR 2018
-95
Hoist Kredit AB EUR 2017
-4
SSAB AB EUR 2019
-76
Color Group AS NOK 2017
-3
Stora Enso OYJ EUR 2018
-70
Teekay Offshore Partners LP NOK 2016
-2
Stora Enso OYJ EUR 2018
-67
SAS AB SEK 2017
-2
Meda AB SEK 2019
-67
Teekay Offshore Partners LP NOK 2017
-1
Meda AB SEK 2018
-66
Stockmann OYJ Abp EUR 2018
-1
Ahlstrom OYJ EUR 2019
-61
Nynas AB SEK 2018
Fred Olsen Energy ASA NOK 2016
226
Golden Close Maritime Corp Ltd USD…
288
Seadrill Ltd NOK 2018
239
Solstad Offshore ASA NOK 2016
292
Solstad Offshore ASA NOK 2016
North Atlantic Drilling Ltd NOK 2018
North Atlantic Drilling Ltd NOK 2018
317
286
Farstad Shipping ASA NOK 2017
473
Fred Olsen Energy ASA NOK 2019
289
Solstad Offshore ASA NOK 2019
480
Solstad Offshore ASA NOK 2019
Fred Olsen Energy ASA NOK 2019
302
Farstad Shipping ASA NOK 2018
326
448
542
400
Stora Enso OYJ EUR 2016
-16
234
266
500
-23
Fred Olsen Energy ASA NOK 2016
207
600
YTD in local currencies
300
200
100
0
Farstad Shipping ASA NOK 2017
713
Farstad Shipping ASA NOK 2018
737
Olympic Ship AS NOK 2019
875
Olympic Ship AS NOK 2017
Olympic Ship AS NOK 2017
891
Olympic Ship AS NOK 2019
-100
Change in local currencies (bp)
1000 800 600 400 200
0
-200 -400
Change in local currencies (bp)
Source: Bloomberg, Danske Bank Markets (both charts)
7
Danske Bank Markets Nordic High-Yield Index
• Last week, we saw moderate flows in the Nordic high-yield
market and the spreads remained more or less unchanged.
• No new Nordic high-yield issues came to this market
during last week.
• We expect more issuance activity over the next month.
Danske Bank Markets Nordic High-Yield Index
106.0
105.5
105.0
104.5
104.0
103.5
103.0
102.5
102.0
101.5
101.0
100.5
100.0
Dec-2014 Feb-2015
460
440
420
400
380
360
340
320
Apr-2015
Jun-2015
300
Aug-2015
DBM Hedged NOK Nordic HY Index Value
DBM Hedged EUR Nordic HY Index Value
DBM Nordic HY Index, ASW-spread (bps). RHS
Key index statistics
Date
Yield
ASW spread, bps
# Bonds
AVG credit rating
Avg duration
TR since start
TR YTD
TR MTD
Index sector breakdown
Index start
Index end
Change
31-dec-2014 13-sep-2015
4.4%
430
413
-17
103
BB2.9
3.9%
3.9%
0.1%
Source: Bloomberg, Danske Bank Markets [all tables and charts]
Real estate
13%
Technology
2%
Utilities
3%
Consumer,
Cyclical
6%
Communica
tions
9%
Industrial
15%
Diversified
4%
Basic
Materials
15%
Consumer,
non-cycli.
10%
Energy
16%
8
Recent Nordic high-yield issuance
Selected new issues (High Yield)
Date
Issuer
Coupon
CCY Volume
Maturity
S&P / Mdy / Fitch ASW/DM
03-09-2015
Lock As
7%
EUR
30 m
Aug-21
B+ / B2 /
505
03-09-2015
Lock As
EUR003M +550bps
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
26-06-2015
Fastighets Gronlandet So
STIB3M +275bps
SEK
425 m
Jun-21
/ /
275
24-06-2015
Solteq Oyj
6%
EUR
27 m
Jul-20
/ /
535
22-06-2015
Uppfinnaren 1 Ab
10%
SEK
175 m
PERP
/ /
775
10-06-2015
Sagax Ab
STIB3M +320bps
SEK
300 m
Jun-20
/ /
320
17-06-2015
Func Food Group
EUR003M +900bps
EUR
38 m
Jun-19
/ /
900
03-06-2015
Bw Offshore Ltd
NIBOR3M +425bps
NOK
900 m
Jun-20
/ /
425
28-05-2015
Hoegh Lng Holdings
US0003M +500bps
USD
130 m
Jun-20
/ /
500
25-03-2015
Corem Property Grp Ab
STIB3M +350bps
SEK
650 m
Apr-18
/ /
350
22-05-2015
Nelja Energia As
EUR006M +650bps
EUR
50 m
Jun-21
/ /
650
21-05-2015
Color Group Asa
NIBOR3M +485bps
NOK
700 m
Jun-20
/ /
485
21-05-2015
Technopolis Plc
3.75%
EUR
150 m
May-20
/ /
340
12-05-2015
Norwegian Air Shuttle As
NIBOR3M +575bps
NOK
1 000 m
May-18
/ /
575
11-05-2015
Golar Lng Partners Lp
US0003M +440bps
USD
150 m
May-20
/ /
440
06-05-2015
Teekay Lng Partners
NIBOR3M +370bps
NOK
1 000 m
May-20
/ /
370
29-04-2014
Aligera Holding Ab
STIB3M +500bps
SEK
500 m
May-19
/ /
500
Source: Danske Bank Markets
9
Company news from the past week (high yield)
Name
Höegh LNG
SAS
News
Höegh LNG successfully raised USD100m in equity. This will most likely trigger an order for another FSRU
newbuilding to meet the increased demand for these assets following the drop in oil and LNG prices. The
proceeds are sufficient to fund the USD90m of equity instalments needed per FSRU (assuming 70% debt to
be secured). The reason for raising equity in HLNG rather than drop downs to HMLP is most likely the delayed
drop down of Independence being pushed into 2016, which has hindered the company to order more FSRUS,
as doing so beforehand would have increased the risk in HLNG substantially.
SAS reported a solid Q3 15 (May-July) with pre-tax profit before non-recurring items of SEK996m vs
SEK759m in Q2 14. FX headwind pares the positive effect from lower fuel prices but the impact from declining
fuel prices will increase as SAS has larger spot exposure, which should continue to support the result. SAS
has hedged 72% of fuel consumption for the next 12 months (this reflects 83% in Q4 15 - and 53% in Q4 16),
whereas 69% of USD is hedged for the next 12 months. Furthermore, the result is supported by continued
cost cutting. SAS keeps FY guidance of a pre-tax result that is clearly positive. According to SAS‘s own
calculations the company is now net debt free as financial net debt is a cash position of SEK183m. Equity ratio
21% end-Q3 15. Over the past year we have had a positive view on the Nordic airline sector due to a
combination of low capacity growth which supports ticket prices and lower fuel prices. We believe our view is
now playing out in the numbers and we believe this will continue in H2 15 due to low capacity additions in the
Nordic airspace. We maintain our positive view on the SAS 2017 bond.
Implication
Credit positive
Credit positive
Source: Danske Bank Markets
10
Scandi Investment Grade
11
Overweight – Vestas EUR 2.75% 2022
IG credit profile but priced as HY (first published on 19 August)
Indicative ASW offer
(bps)
290
280
270
260
250
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
2014
•
On 19 August, Vestas delivered strong and credit
positive Q2 15 results, with a robust globally spread
order intake, a record order backlog, healthy cash flows
and very strong credit metrics.
•
Given the volatile global wind turbine markets, the high
credit quality of some competitors (GE, Siemens), the
recent very harsh restructuring of the company and the
prudent financial targets introduced (e.g. maximum
target net debt/EBITDA < 1x ), we do not expect the
group to accelerate future re-leveraging aggressively in
an unbalanced way.
•
The key risk factor for this name remains political. The
global wind turbine industry is likely to be dependent on
subsidies for years to come, although less and less so
as the turbine produced cost per MWh is reduced. This
is a strategic priority for Vestas.
•
Given our view of Vestas as a ‘BBB-’ credit, we
reiterate that we regard the current pricing of the
2.75% 2022 as attractive at an ASW of +270bp.
•
In our view, a ‘fair’ credit spread for this type of bond
would be in the range of 125-150bp, reflecting a
‘political/volatility’ spread add-on of 40-65bp to the ‘BBB-’
curve.
VWSDC '22
(NR/NR)
Corporates: BBB-
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Bloomberg, Moody’s, Danske Bank Markets
See Vestas Q2 15: Strong performance – bonds
attractively priced, 19 August.
12
Buy Nykredit T2 CoCo Call 2021 or Nykredit AT1 Call 2020
Published in Trade recommendation: Q2 could be the turning point for Nykredit, 10 August 2015
•
‘Nykredit Realkredit (’A’/NO, ‘A’/S) has been struggling with large deficits in its banking subsidiary (Nykredit Bank (‘A’/NO, ‘A’/S, DBM:
Marketweight) due to interest swap contracts with clients. We believe this could turn in Q2 due to the spike in the 30Y DKK swap rate.
•
Nykredit has issued a tier 2 bond as a CoCo with a 7% trigger and an AT1 with a 7.125% trigger. Both trade at attractive spreads to their Nordic
peers. We would use the expected good Q2 results to buy the two bonds.
•
The tier 2 bond is an ‘odd’ instrument given its CoCo feature. The reason for the CoCo feature is that Danish banks are allowed to cover the Pillar 2
requirement with either CET1 capital or CoCo bonds with a trigger of a minimum 7%. Nykredit had a 4% Pillar 2 requirement at end-Q1 15; the T2
CoCo accounted for c.1.3%.
•
We believe the T2 CoCo trades at a discount to peers because of the CoCo feature. We do not consider this to be justified, as we see the risk of a
trigger as only possible in a restructuring scenario and hence equally possible for a ‘normal’ T2 bond. The coupon is mandatory with full write off.’
AT1bonds
Tier 2 bonds
400
Indicative Z spread offer
(bps)
Indicative Z spread offer
(bps)
NYKRE '21 (BBB/NR)
350
550
NYKRE '20 (EUR)
DANBNK '20 (EUR)
500
DANBNK '22 (EUR)
300
450
250
400
200
DNBNO '20 (USD)
DANBNK '21 (BBB/NR)
150
DANBNK '18 (BBB/NR) SWEDA '19 (A-/Baa1)
100
SHBASS '19 (A-/A3)
NDASS '17 (A-/NR)SWEDA '17 (A-/NR) DNBNO '18 (A-/NR)
DNBNO '17 (A-/NR)
50
0
2015
2016
AA+/AA/AA-
350
SEB '21 (BBB/Baa1)
POHBK '22 (A/NR)
A+/A/A-
2018
BBB+/BBB/BBB-
NDASS '21 (USD)
NDASS '24 (USD)
SEB '20 (USD)
SHBASS '21 (USD)
300
DNBNO '20 (NOK)
SBAB '20 (SEK)
250
SEB '17 (BBB/NR)
2017
NDASS '19 (USD)
SWEDA '20 (USD)
2019
BB+/BB/BB-
2020
2021
Not rated by S&P/Moody's
2022
200
2019
2020
2021
2022
2023
2024
2025
Euro equivalent
Source: Bloomberg, Danske Bank Markets (both charts)
13
Recent trade ideas (investment grade)
Recent ideas
Type
Outright
Trade
Buy Vestas 2022 (revisited).
Idea
The Vestas EUR 2.75% 2022 trades cheap to a EUR
corporate BBB. curve.
Opened
Start spread
Outright
Buy Nykredit AT1 (perpetual)
Nykredit has issued an AT1 with a 7.125% trigger.This
hybrid trade attractive to Nordic peers.
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.
We recommend to buy the ISS Global A/S 2020 as we
believe valuation is attractive compared to ISS Global
A/S’ BBB-/Positive Outlook from S&P as the bond is
In our view the Destia 2019 FRN trades at a fairly
attractive spread when compared to our B+ indicative
senior unsecured rating. This is in our view most likely a
Opened
Start spread
Outright
Sector spread
Outright
Switch from Securitas 2018 to
ISS Global A/S 2020
Buy Destia 2019
Opened
Start spread
Opened
Start spread
Opened
Start spread
24 Aug 2015
270
10 Aug 2015
511
10 Aug 2015
361
03 Jun 2015
32
26 May 2015
433
Source: Danske Bank Markets
See the end of this presentation for a list of our coverage including shadow ratings and recommendations
14
Best and worst performers (Nordic coverage universe)
- Investment grade
1 week in local currencies
-1
Fingrid OYJ EUR 2024
0
Nordea Bank AB EUR 2016
-1
DONG Energy A/S EUR 2022
0
Danske Bank A/S EUR 2017
-1
Svenska Cellulosa AB SCA EUR 2023
1
DNB Bank ASA EUR 2019
-1
Nordea Bank AB EUR 2022
1
Jyske Bank A/S EUR 2017
-1
TeliaSonera AB EUR 2027
1
Lansforsakringar Bank AB SEK 2020
-1
Nordea Bank AB EUR 2025
1
Pohjola Bank Oyj EUR 2017
-1
Statoil ASA EUR 2020
1
Danske Bank A/S EUR 2018
-1
SKF AB EUR 2018
1
Skandinaviska Enskilda Banken AB EUR…
-1
SBAB Bank AB EUR 2018
1
Nordea Bank AB EUR 2016
TeliaSonera AB EUR 2022
-1
13
Statkraft AS EUR 2017
3
Teollisuuden Voima Oyj EUR 2021
14
Statkraft AS EUR 2019
3
DONG Energy A/S EUR 2016
14
Telenor ASA EUR 2017
3
Telefonaktiebolaget LM Ericsson EUR…
14
Telefonaktiebolaget LM Ericsson EUR…
TeliaSonera AB EUR 2017
15
TDC A/S EUR 2018
15
Vattenfall AB EUR 2019
4
Vattenfall AB EUR 2019
4
5
TDC A/S EUR 2018
5
TDC A/S EUR 2022
4
2
0
-2
Change in local currencies (bp)
DONG Energy A/S EUR 2016
16
Fortum OYJ EUR 2016
20
Fortum OYJ EUR 2016
6
TeliaSonera AB EUR 2017
16
Neste Oyj EUR 2016
6
6
Swedbank AB EUR 2016
1
Telenor ASA EUR 2017
3
8
1 month in local currencies
Neste Oyj EUR 2016
23
25
20
15
10
5
0
-5
Change in local currencies (bp)
Source: Bloomberg, Danske Bank Markets (both charts)
15
Selected new investment-grade issues
Date
Issuer
Coupon
CCY Volume
Maturity
S&P / Mdy / Fitch ASW/DM
10/09/2015
Apple Inc
2%
EUR
1 000 m
Sep/27
AA+ / Aa1e /
85
10/09/2015
Shell International Fin
1.25%
EUR
1 250 m
Mar/22
/ Aa1e /
67
10/09/2015
Fce Bank Plc
0.942%
EUR
700 m
Sep/19
BBB / Baa3e / BBB-e
98
09/09/2015
Bmw Us Capital Llc
1.125%
EUR
1 000 m
Sep/21
/ A2e /
65
Source: Danske Bank Markets
16
Company news from the past week (investment grade)
Name
SR-Bank
Maersk A/S
Maersk A/S
News
Moody's published a rather reassuring note on SR-Bank on Thursday last week with the headline:
"Prudent Underwriting Upholds Strong Performance In Challenging
Environment". We don't disagree with most of the conclusions. However, we believe Moody's is
missing the biggest uncertainty for SR-Bank (and for the other Norwegian banks) and that is
consumer spending. We fear that consumers will cut back in spending due to the ongoing
uncertainty around oil-related activities and not least the property prices, which are likely to hurt
the domestic SMEs and hence the banks. This is what happened in Denmark after the property
bubble burst in 2007 and the financial crisis hit the economy in 2009. For that reason we continue
to be cautious on the Norwegian banks.
Following the Annual Capital Markets Day where the main take-away was the CEO's wording of the
Group's increased desire to make acquisitions, the Danish press had several articles on this topic.
Berlingske Business interviewed the CEO of Maersk Oil, Jakob Thomasen, who states that ‘in 2015
and 2016 there is a window for "in-organic" growth (e.g. M&A) as several oil companies reduce
their portfolios’. He also stated that Maersk Oil's current portfolio is ‘not as promising as it used to
be’. Interestingly, the CEO of APMM, Smedegaard, states in the interview that ‘since 2009 our debt
has been lowered by USD10bn - so we can without any problem buy for USD10bn - and probably
more’. Our take remains unchanged => expect credit metrics to weaken over the next 12-18
months due to M&A but expect APMM to remain committed to the BBB+ rating. As APMM EUR
bonds trade on the BBB+ curve we struggle to see upside - although valuation will be supported by
the strong name and strong underlying financials. We maintain our Marketweight on APMM.
APMM has signed an agreement to buy Spanish-based Grup TCB and its 11 container terminals.
Terms and price not disclosed - deal expected to close by end of 2015. APMM Terminals currently
operates 173 terminals so it is a smaller scale addition but it still shows that APMM is looking to
use its strong balance sheet to grow its business over the coming 12-24 months. Overall credit
neutral as the deal is not significant from a Group perspective but highlights risk of credit metrics
weakening from the current strong levels for the BBB+ rating to more fair levels for the BBB+
rating. We believe APMM bonds are fairly valued and maintain our Marketweight recommendation.
Implication
Credit positive
Credit neutral
Credit neutral
Source: Danske Bank Markets
17
Company news from the past week (investment grade)
Name
Maersk A/S
Maersk A/S
News
Moody’s states that it is credit positive for APMM that the British authorities have approved the
development of the Culzean gas field - the largest gas field in the UK. Maersk Oil expects peak daily
production of 60-90,000boepd when fully up and running in 2020-21. Maersk has a 49.99% share
and Maersk Oil expects around 285,000boepd in 2015 in the current Maersk Oil. The additional
contribution from Culzean corresponds to some 10-15% of the current total production. Our take on
this is 1) positive but this also comes with heavy capex in the coming five years - production is backend loaded from a credit perspective 2) from a total Group perspective this has minor impact.
Maersk Oil - the oil and gas business of A.P. Møller Mærsk A/S - received the UK Oil and Gas
Authority’s approval to develop the Culzean field, the UK’s largest gas field. In a challenging
environment for independent oil and gas companies, the approval is credit positive for Maersk Oil
because it will grow the company’s entitlement production and proved reserves. It will also slightly
improve the company’s resource diversification given that Maersk Oil today mostly focuses on oil.
Implication
Credit neutral
Credit positive
Source: Danske Bank Markets
18
Credit Indicators
19
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]
20
Chart pack: relative value
iTraxx vs iBoxx
EUR CDS spreads – Nordic banks
Euro vs US CDS indices - IG (Markit)
Euro vs US HY bond indices (Merrill Lynch)
Source: Bloomberg, Macrobond Financial, Danske Bank Markets [all charts]
21
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]
22
Chart pack: high-yield funds flow
High yield US ETF fund flow
1,800
8,000
1,600
7,000
Cumulative ETF-flow MEUR
Cumulative ETF-flow MEUR
High-yield Europe ETF fund flow
1,400
1,200
1,000
800
600
400
200
0
decjanfebmar- aprmajjunjulaug2014 2015 2015 2015 2015 2015 2015 2015 2015
High Yield - Europe - Fixed Income
6,000
5,000
4,000
3,000
2,000
1,000
0
-1,000
decjan- febmar- aprmaj- jun-20 julaug2014 2015 2015 2015 2015 2015 15 2015 2015
High Yield - North America - Fixed Income
Source: Bloomberg, Danske Bank Markets [all charts]
23
Chart pack: fund flows
Europe, net sales
US, net sales
Sweden, net sales
Norway, net sales
Source: Macrobond Financial, Danske Bank Markets [all charts]
24
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]
25
Coverage universe, credit ratings
and recommendations
26
Our coverage and shadow ratings 1 of 5
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
Cermaq Asa
Citycon Oyj
Color Group As
Com Hem Holding Ab
Corem Property Group Ab
Danfoss A/S
Danske Bank A/S
Dfds A/S
Dlg Finance As
Dna Ltd
Dnb Bank Asa
Dong Energy A/S
Dsv A/S
Eg Holding
Eika Boligkreditt As
Eika Gruppen As
Eksportfinans Asa
Electrolux Ab
Rating
B+
Danske Bank
Outlook Sr. Unsec
Stable
BBB-
Stable
BBB
Stable
BBB+
BBB
B
BBBBB+
BBB-
Stable
Stable
Stable
Stable
Stable
Stable
BB
Stable
BB-
Stable
B+
BB-
Stable
B+
BBBBBBBB-
BBB
B
ABBB
S&P
Rating Outlook
Moody's
Rating Outlook
BBB-
Stable
BBB+
Stable
Baa1
Pos
A
AA-
Stable
Stable
A2
A1
Stable
Stable
Baa2
Neg
Baa2
Stable
A2
Stable
BBB
Stable
BB-
Pos
BBB
A
Stable
Stable
Fitch
Rating Outlook
BBB
Stable
A
Stable
Stable
Stable
Stable
A+
BBB+
Neg
Stable
Aa3
Baa1
Stable
Stable
BBBBBB
Pos
Stable
Ba3
Wr
Stable
BBB+
Stable
Stable
Stable
Stable
WD
Stable
Analyst(s)
Recomm.
Mads Rosendal
Emil Hjalmarsson
Jakob Magnussen
Brian Børsting
MARKETWEIGHT
Mads Rosendal
Mads Rosendal
UNDERWEIGHT
Ola Heldal
MARKETWEIGHT
T. Hovard / L. Holm
T. Hovard / L. Holm
Øyvind Mossige
Mads Rosendal
Øyvind Mossige
Mads Rosendal
Brian Børsting
MARKETWEIGHT
Knut-Ivar Bakken
Emil Hjalmarsson
OVERWEIGHT
Niklas Ripa
Ola Heldal
Emil Hjalmarsson
Jakob Magnussen
Niklas Ripa
Mads Rosendal
Ola Heldal
T. Hovard / L. Holm UNDERWEIGHT
Jakob Magnussen MARKETWEIGHT
Brian Børsting
Jakob Magnussen
T. Hovard / L. Holm
T. Hovard / L. Holm
T. Hovard / L. Holm
Brian Børsting
MARKETWEIGHT
27
Our coverage and shadow ratings 2 of 5
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Danske Bank
Company
Rating Outlook Sr. Unsec
Elenia Oy
Elisa Oyj
Entra Eiendom As
AStable
Farstad Shipping Asa
BB
Neg
BBFingrid Oyj
Finnair Oyj
BB
Stable
Fortum Oyj
Fortum Varme Holding Samagt Med Stockholms Stad Ab
Fred Olsen Energy Asa
BBStable
B+
G4S Plc
Getinge Ab
BB+
Neg
Golar Lng Partners Lp
BB
Stable
BBGolden Close Maritime Corp Ltd
BHeimstaden Ab
BB
Stable
BBHemso Fastighets Ab
BBB+
Stable
BBB
Hkscan Oyj
BB
Stable
Hoist Kredit Ab
BBStable
B+
Husqvarna Ab
BBBPos
Hoegh Lng Holdings Ltd
BBStable
B+
Ikano Bank Ab
BBB
Stable
Investor Ab
Iss A/S
J Lauritzen A/S
B
Stable
BJernhusen Ab
AStable
Jyske Bank A/S
Kemira Oyj
BBBStable
Kesko Oyj
BBB
Stable
Klaveness Ship Holding As
BBStable
B+
Loomis Ab
BBBStable
Luossavaara-Kiirunavaara Ab
BBB+
Neg
Meda Ab
BBStable
Metsa Board Oyj
Metso Oyj
S&P
Rating Outlook
Moody's
Rating Outlook
Fitch
Rating Outlook
BBB+
Stable
Baa2
Stable
A+
Stable
A1
Stable
A+
Stable
BBB+
BBB+
Stable
Stable
Baa1
Stable
A-
Neg
BBB-
Stable
A-
Stable
AABBB-
Stable
Pos
A1
Stable
A-
Stable
Baa1U
Wr
Stable
BB
BBB
Stable
Stable
Ba2
Baa2
Stable
Stable
Analyst(s)
Recomm.
Jakob Magnussen
Ola Heldal
Ola Heldal
Øyvind Mossige
Jakob Magnussen
Brian Børsting
Jakob Magnussen
Jakob Magnussen
Sondre Stormyr
Brian Børsting
Louis Landeman
Bjørn Kristian Røed
Sondre Stormyr
Louis Landeman
Emil Hjalmarsson
Brian Børsting
Gabriel Bergin
Emil Hjalmarsson
Bjørn Kristian Røed
T. Hovard / L. Holm
Brian Børsting
Brian Børsting
Bjørn Kristian Røed
Emil Hjalmarsson
T. Hovard / L. Holm
Mads Rosendal
Mads Rosendal
Bjørn Kristian Røed
Brian Børsting
Louis Landeman
Louis Landeman
Mads Rosendal
Mads Rosendal
OVERWEIGHT
OVERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
OVERWEIGHT
OVERWEIGHT
OVERWEIGHT
OVERWEIGHT
MARKETWEIGHT
28
Our coverage and shadow ratings 3 of 5
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
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 Yield Asa
Odfjell Se
Olav Thon Eiendomsselskap Asa
Olympic Ship As
Orava Residential Reit Plc
Orkla Asa
Outokumpu Oyj
Pohjola Bank Oyj
Posten Norge As
Postnord Ab
Prosafe Se
Ramirent Oyj
Saab Ab
Sandnes Sparebank
Sandvik Ab
Sas Ab
Sbab Bank Ab
Scania Ab
Schibsted Asa
Seadrill Ltd
Rating
BBBBBBBBB-
Danske Bank
Outlook Sr. Unsec
Stable
Stable
Stable
BBB+
BBB-
Stable
Stable
BBBBBBB-
Neg
Neg
Stable
B+
B+
B+
BB
B+
BBB+
B+
B+
BBB+
B
Stable
B+
BBB
ABBB+
BBBB+
BBB+
BBB+
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Stable
Pos
Neg
S&P
Rating Outlook
Stable
Stable
Fitch
Rating Outlook
BB+
Pos
Ba2
Stable
BB
Pos
AA-
Neg
Aa3
Stable
AA-
Stable
A
Neg
Baa3U
Stable
A
Stable
AA-
Neg
Aa3
Stable
A+
Stable
B
B+
Wr
BBB
BA
A-
BBB
BB-
Moody's
Rating Outlook
B+
Neg
Stable
Neg
Stable
Wr
A2
Stable
Stable
Analyst(s)
Emil Hjalmarsson
Jakob Magnussen
Emil Hjalmarsson
Ola Heldal
Jakob Magnussen
T. Hovard / L. Holm
T. Hovard / L. Holm
Sondre Stormyr
Brian Børsting
Ola Heldal
T. Hovard / L. Holm
Jakob Magnussen
Øyvind Mossige
Bjørn Kristian Røed
Ola Heldal
Øyvind Mossige
Mads Rosendal
Ola Heldal
Mads Rosendal
T. Hovard / L. Holm
Ola Heldal
Gabriel Bergin
Sondre Stormyr
Brian Børsting
Emil Hjalmarsson
T. Hovard / L. Holm
Mads Rosendal
Brian Børsting
T. Hovard / L. Holm
Mads Rosendal
Ola Heldal
Sondre Stormyr
Recomm.
OVERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
OVERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
29
Our coverage and shadow ratings 4 of 5
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
Securitas Ab
Skandinaviska Enskilda Banken Ab
Skanska Ab
Skf Ab
Sognekraft As
Solstad Offshore Asa
Spar Nord Bank A/S
Sparebank 1 Boligkreditt As
Sparebank 1 Nord Norge
Sparebank 1 Smn
Sparebank 1 Sr-Bank Asa
Sponda Oyj
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
Swedavia Ab
Swedbank Ab
Swedish Match Ab
Svensk Fastighetsfinansiering Ab
Svenska Cellulosa Ab Sca
Svenska Handelsbanken Ab
Rating
Danske Bank
Outlook Sr. Unsec
BBB+
Stable
BBB
BBBBB+
A-
Stable
Stable
Stable
Stable
S&P
Rating Outlook
BBB
Pos
A+
Neg
BBB
BBB-
Stable
BB
Stable
BBB+
Stable
B+
BB+
Stable
Stable
BBB+
Stable
BBBAA-
Stable
Stable
Stable
BBB
Stable
Moody's
Rating Outlook
Wr
Aa3
Stable
Baa1
Neg
A1
A1
A1
Stable
Stable
Stable
Fitch
Rating Outlook
A+
Pos
BBB
B+
A
AA-
Stable
Stable
Stable
BB-
Stable
AA+
AA-
Stable
Stable
Stable
Aaa
Wr
Aa2
Stable
Stable
Stable
BB
Stable
B2
Stable
BB
BBB+
BBB+
Stable
Neg
Stable
Ba2
Nr
Baa1
Stable
Stable
Stable
WD
BBB
Neg
A+
BBB
Stable
Stable
Aa3
Baa2
Stable
Stable
A+
Pos
AAA-
Stable
Neg
Baa1
Aa2
Stable
Stable
AA-
Stable
BB
BBB-
Stable
Analyst(s)
Recomm.
Brian Børsting
T. Hovard / L. Holm
Emil Hjalmarsson
Mads Rosendal
Jakob Magnussen
Øyvind Mossige
T. Hovard / L. Holm
T. Hovard / L. Holm
T. Hovard / L. Holm
T. Hovard / L. Holm
T. Hovard / L. Holm
Emil Hjalmarsson
Mads Rosendal
Jakob Magnussen
Jakob Magnussen
Jakob Magnussen
Jakob Magnussen
Ola Heldal
Niklas Ripa
Mads Rosendal
Bjørn Kristian Røed
Mads Rosendal
T. Hovard / L. Holm
T. Hovard / L. Holm
Jakob Magnussen
T. Hovard / L. Holm
Gabriel Bergin
T. Hovard / L. Holm
Brian Børsting
Louis Landeman
Mads Rosendal
T. Hovard / L. Holm
MARKETWEIGHT
OVERWEIGHT
UNDERWEIGHT
UNDERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
OVERWEIGHT
MARKETWEIGHT
UNDERWEIGHT
UNDERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
30
Our coverage and shadow ratings 5 of 5
Ratings from S&P/Moody's/Fitch and Danske Bank Markets shadow ratings
Company
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
Tine Sa
Upm-Kymmene Oyj
Vasakronan Ab
Vattenfall Ab
Vestas Wind Systems A/S
Victoria Park Ab
Wihlborgs Fastigheter Ab
Wilh Wilhelmsen Asa
Volvo Ab
Yit Oyj
Rating
Danske Bank
Outlook Sr. Unsec
BB
Stable
BB-
BB+
BB
BBBBB
Stable
Stable
Stable
Stable
BB
BBB+
BBB+
BBB+
Stable
Stable
A-
Stable
S&P
Rating Outlook
Stable
Stable
Stable
B
Stable
Fitch
Rating Outlook
BBB
Neg
Baa3
Stable
BBB
Neg
BBB+
A
ABBB-
Stable
Stable
Stable
Neg
Baa1
A3
A3
Wr
Stable
Stable
Neg
BBB+
Stable
ABBB
Stable
Stable
BB+
Stable
Ba1
Stable
WD
A3
Neg
A-
Neg
Baa2
Stable
BBB
Stable
ABBBBBBB+
BBB-
Moody's
Rating Outlook
Baa1
Stable
B+
BB
BBB
Neg
Analyst(s)
Recomm.
T. Hovard / L. Holm
Niklas Ripa
Ola Heldal
Louis Landeman
Bjørn Kristian Røed
Bjørn Kristian Røed
Ola Heldal
Ola Heldal
Ola Heldal
Ola Heldal
Jakob Magnussen
Ola Heldal
Ola Heldal
Mads Rosendal
Emil Hjalmarsson
Jakob Magnussen
Niklas Ripa
Louis Landeman
Louis Landeman
Bjørn Kristian Røed
Mads Rosendal
Emil Hjalmarsson
OVERWEIGHT
MARKETWEIGHT
MARKETWEIGHT
MARKETWEIGHT
UNDERWEIGHT
OVERWEIGHT
MARKET WEIGHT
UNDERWEIGHT
OVERWEIGHT
MARKETWEIGHT
Source: Standard & Poor's, Moody's, Fitch, Danske Bank Markets
31
Fixed Income Credit Research team
Thomas Hovard, Chief Analyst
Head of Credit Research
+45 45 12 85 05
[email protected]
Brian Børsting, Senior Analyst
Industrials
+45 45 12 85 19
[email protected]
Ola Heldal, Senior Analyst
TMT
+47 85 40 84 33
[email protected]
Louis Landeman, Senior Analyst
TMT, Industrials
+46 8 568 80524
[email protected]
Lars Holm, Senior Analyst
Financials
+45 45 12 80 41
[email protected]
Sondre Dale Stormyr, Senior Analyst
Offshore Rigs
+47 85 40 70 70
[email protected]
Mads Rosendal, Analyst
Industrials, Pulp & Paper
+46 8 568 80594
[email protected]
Gabriel Bergin, Analyst
Strategy, Industrials
+46 8 568 80602
[email protected]
Henrik René Andresen, Senior Analyst
Credit Portfolios
+45 45 13 33 27
[email protected]
Jakob Magnussen, Senior Analyst
Utilities, Energy
+45 45 12 85 03
[email protected]
Niklas Ripa, Senior Analyst
High Yield, Industrials
+45 45 12 80 47
[email protected]
Øyvind Mossige, Senior Analyst
Oil Services
+47 85 40 54 91
[email protected]
Knut-Ivar Bakken, Senior Analyst
Fish Farming
+47 85 40 70 74
[email protected]
Bjørn Kristian Røed, Senior Analyst
Shipping
+47 85 40 70 72
[email protected]
Emil Hjalmarsson, Analyst
Real Estate, Construction
+46 8 568 80634
[email protected]
Katrine Jensen, Analyst
Financials
+45 45 12 80 56
[email protected]
Iver Christian Båtvik, Analyst
Shipping
+47
[email protected]
32
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.
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33
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