Weekly Credit Update - Danske Bank › ... › Documents › WeeklyCreditUpdate… · 16 June 2015 . Weekly Credit Update . Important disclosures and certifications are contained

16 June 2015

Weekly Credit Update

Important disclosures and certifications are contained from page 24 of this report

Analyst Mads Rosendal

+46 8 56 88 06 34 [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

What’s on our mind - General credit market news

• Overall credit markets remained volatile last week as negotiations between Greece and its creditors turned south, which subsequently saw IMF pull out of negotiations. Both Itraxx main and crossover widened as a result adding about 5bp and 17bp respectively. It seems unlikely that a solution with Greece will be reached next week, hence we expect market jitters to continue for now.

• After a recent spread widening the iTraxx main is now at a higher level (+74bp) than in the beginning of the year (+62bp). The lowest level YTD was 50bp in the beginning of March. iTraxx crossover (now trading at +329bp) however, still has a way to go before reaching the level at the beginning of the year (+346bp)

• As a result of the market volatility some issuers probably chose to postpone printing, which was reflected in a very dull primary market adding a mere EUR1.25bn in corporate EUR issuance divided between two entities. We expect this to be a low point as more issuers will most likely try to get their prints done before the summer lull starts in a few weeks.

• Secondary market liquidity remains poor with few buyers wanting to dip their toes in the water despite juicier spreads.

4

Themes - New regulation for Norwegian home owners

• On Monday, the Norwegian Finance Ministry published new regulation for new home owners in order to dampen the house prices in Norway.

• According to our Norwegian chief economist the measures seemed close to expectations, where the reduced ability to provide mortgages with a LTV>85% probably will be the most effective measure. However, banks are allowed a 10% pool (of new loans) where LTV could be above 85%. Also the requirement of installment for LTV>70% will have an effect.

• No doubt these two measures will make it more difficult for younger people to get a mortgage loan, in our view. However, those with general credit lines with LTV>70% (i.e. ‘parents’) can still act as guarantor. This is less stringent than feared, and can counteract some of the tightening for younger people. All in all, the measure announced will most likely to contribute to dampen the housing market. But as the overall effect is highly uncertain, we doubt this will affect the interest rate decision on Thursday (where we expect a rate cut of 25 bp.) The proposal will be implemented at July 1., and last until end 2016.

• From a credit perspective we welcome any measures taken in order to dampen the Norwegian house market but we do see a risk of bad timing as lower house prices in tandem with lower economic growth caused by lower oil price could be a bad cocktail for the banks. Our fear for the Norwegian banks is not the mortgage exposure but the SME exposure, as lower consumer confidence (due to lower house prices and economic growth) could mean lower consumption as hence increased credit risk for domestic SMEs.

5

Best and worst performers - Investment grade

Source: Bloomberg, Danske Bank Markets (both charts)

1 week in local currencies 1 month in local currencies

22.6

19.3

18.9

15.2

15.1

14.7

13.7

13.5

13.5

13.2

1.4

1.3

1.2

1.1

0.8

0.5

0.5

0.1

0.0

-0.3

-50510152025

Teollisuuden Voima Oyj EUR 2021

Teollisuuden Voima Oyj EUR 2019

Fortum OYJ EUR 2016

Nordea Bank AB EUR 2025

Neste Oyj EUR 2016

Fortum OYJ EUR 2021

Fortum OYJ EUR 2019

Fortum OYJ EUR 2022

TeliaSonera AB EUR 2031


G4S International Finance PLC EUR 2018

Danske Bank A/S EUR 2017


Skandinaviska Enskilda Banken AB EUR …

DNB Bank ASA EUR 2020

Jyske Bank A/S EUR 2017

DNB Boligkreditt AS EUR 2018

Danske Bank A/S EUR 2018

Nordea Bank AB SEK 2017

Swedbank AB EUR 2016

Change in local currencies (bp)

4.9

4.9

4.8

3.0

3.0

2.7

2.0

1.6

1.2

1.1

-5.1

-5.1

-5.3

-5.5

-5.5

-5.5

-5.5

-5.8

-6.2

-7.5

-10-8-6-4-20246

Lansforsakringar Bank AB SEK 2020

Fortum OYJ EUR 2016

Danske Bank A/S SEK 2019

Neste Oyj EUR 2016

SBAB Bank AB SEK 2018

Skandinaviska Enskilda Banken AB EUR …

Swedbank AB EUR 2017

DONG Energy A/S EUR 2016


Skandinaviska Enskilda Banken AB SEK …

Statoil ASA EUR 2025

Fortum OYJ EUR 2022

Statkraft AS EUR 2022


Telenor ASA EUR 2024

Telenor ASA EUR 2025

Fingrid OYJ EUR 2024

Atlas Copco AB EUR 2023

Svenska Cellulosa AB SCA EUR 2023

Vattenfall AB EUR 2024


6

Best and worst performers - High yield

Source: Bloomberg, Danske Bank Markets (both charts)

1 week in local currencies 1 month in local currencies

69

22

17

15

15

14

12

11

11

10

-29

-29

-31

-32

-37

-47

-51

-55

-106

-130

-150-100-50050100

Farstad Shipping ASA NOK 2017

Farstad Shipping ASA NOK 2018

Meda AB SEK 2018

Meda AB SEK 2019

SAS AB SEK 2019

Stora Enso OYJ EUR 2019

Prosafe SE NOK 2018

Nokia OYJ EUR 2019

YIT OYJ EUR 2016

Stolt-Nielsen Ltd NOK 2016

Hoist Kredit AB SEK 2016

Stena AB USD 2024

Akelius Residential Property AB SEK …

Teekay Offshore Partners LP NOK 2019

Destia Group Oyj EUR 2019

North Atlantic Drilling Ltd USD 2019

Seadrill Ltd SEK 2019

Teekay Offshore Partners LP/Teekay …

Beerenberg Holdco II AS NOK 2018

Golden Close Maritime Corp Ltd USD …


17

13

10

10

9

9

8

8

8

7

-4

-5

-6

-9

-10

-10

-15

-40

-42

-49

-60-40-2002040

SAS AB SEK 2019

Hoist Kredit AB SEK 2016

Nokia OYJ USD 2039

Nokia OYJ EUR 2019

Stena International SA USD 2024

Finnair OYJ EUR 2049

DLG Finance AS DKK 2018

UPM-Kymmene OYJ USD 2027

Stena AB EUR 2020

Akelius Residential Property AB SEK …

SSAB AB SEK 2019

Ahlstrom OYJ EUR 2019

SAS AB SEK 2017

Seadrill Ltd SEK 2019

Nynas AB SEK 2018

North Atlantic Drilling Ltd NOK 2018

Hoist Kredit AB EUR 2017

Teekay Offshore Partners LP/Teekay …

Beerenberg Holdco II AS NOK 2018

North Atlantic Drilling Ltd USD 2019


7 Source: Bloomberg, Danske Bank Markets

Buy ISS Global A/S 2020 vs. Sell Securitas 2017 and 2018 (published 09-06-2015)

• 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 currently trading close to the ‘BBB-’ curve.

• We believe that ISS Global A/S within the next 12 months will have established the track record of disciplined financial policy needed to be commensurate with a ‘BBB’ rating from S&P (one-notch upgrade compared to current rating). We believe that the current main shareholders (KIRKBI A/S and Ontario Teachers Pension Plan) have interest in stable cash flow and a relatively high dividend yield which in our view makes transformational M&A activity less likely. Note that S&P has the same rating on ISS Global A/S and ISS A/S. We have an Overweight recommendation on ISS.

• Securitas is rated BBB/Positive Outlook from S&P. We acknowledge the cost restructuring done by Securitas and the deleveraging in recent years. However, in our view Securitas needs to increase its capex spending significantly in the high-tech security solution segment to avoid continued price pressure in the vital manned guarding segment. Hence we believe that significant M&A activity is likely within the next 12-18 months which could prevent any rating upgrade from S&P. We have an Marketweight recommendation on Securitas.

ISSDC '20 (BBB-/Baa3)

GFSLN '17 (BBB-/NR)

GFSLN '18 (BBB-/NR)

SECUSS '21 (BBB/NR)

SECUSS '17 (BBB/NR)

SECUSS '18 (BBB/NR)

LOOMBS '19 (NR/NR)

ISSDC '24 (BBB-/Baa3)

0

10

20

30

40

50

60

70

80

90

100

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Indicative ASW offer (bps)

Corporates: BBB-

Corporates: BBB

Corporates: BBB+

8

Source: Danske Bank Markets

Recent trade ideas

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

Recent ideas Type Trade Idea

Sector spread Switch from Securitas 2018 to ISS

Global A/S 2020

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 currently trading close to the ‘BBB-’ curve.

Opened 03-06-2015

Start spread 32 Outright Buy Destia 2019 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 combination of low liquidity and Destia’s PE ownership.

Opened 26-05-2015

Start spread 433 Sector spread Switch from Fortum 19's to TVO 19's Sell the Fortum 19's trading tight compared to fair value

and buy TVO 19's trading wide even if they are downgraded Closed 11-05-2015

Start spread 92 Sector spread Switch from Metso 2019 to Sandvik

2026

We suggest selling the METSO 2019’s which have had a good run since the spin-off of the groups Pulp, Paper and Power business in 2014. Metso and Sandvik have similar business exposure (Mining&Energy), but Sandvik is c. 3x larger (in terms of revenues) and diversified into sectors to which Metso has no exposure. Opened 27-04-2015

Start spread 56 Outright Buy Neste Oil 2022 The Neste Oil 2022's 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+240bps trades wide relative to other similar unrated SEK bonds. Opened 13-04-2015

Start spread 225

9


Company news from the past week

Name News Implication

Metso, Sandvik and

Atlas Copco

United Kingdom based peer Weir Group comments trading conditions in its CMD. States that Minerals division's market conditions are as previously expected in the Q1 report and are showing "resilience in subdued markets" but that its Oil&Gas division is experiencing weaker than expected demand. Orders for that division have continued to sequentially fall in Apr and May and Jan-May orders are 34% down, y/y, more than 23% down, y/y in Jan-Mar. Reason is weak demand in the upstream Oil&Gas business. Positively their Minerals business is living up to previous expectations. On the other hand both Metso, Sandvik and Atlas have Oil&Gas exposure. Metso's Oil&Gas exposure mainly Oil&Gas equipment was c. 7% of Group sales in 2014 and is predominantly downstream. Atlas Copco has about 9% Oil&Gas exposure spread across the E&P value chain i.e. both Up, mid and downstream. Sandviks exposure to Oil&Gas is also around 9% but it has a high upstream exposure following its purchase of Varel group i.e. the statements from Weir are mostly negative for Sandvik but we expect to see pressure on Oil&gas order intakes in all three companies in Q2. It is positive that mining demand seems not to have taken a further hit.

Credit negative

ESB

ESB (NR) got upgraded to ’A-’ from ’BBB+’ by S&P’s last night. This is a direct consequence of the upgrade of the Rep. of Ireland to ‘A+’ this Friday. ESB now receives one notch of government support to its stand alone rating. The agency maintains a stable outlook to ESB’s new rating. S&P’s notes that if Ireland should be upgraded further in the future, this will not in itself mean that ESB is upgraded further as the link to the government is “only” considered ‘Moderately high’. The upgrade was largely expected and we only expect modest positive spread reaction to this.

Credit positive

Ervia

Ervia (NR), which is the former Bord Gais also got upgraded last night as a result of the upgrade of the Rep. of Ireland to ‘A+’. Ervia’s rating was upgraded to ‘A’ from ‘A-‘ with a stable outlook. Ervia subsequently now receives two notches of government support due to S&P’s considering Ervia’s link to the government being ‘High’. S&P’s mentions that if Ireland is upgraded further it will not lead to additional upgrades of Ervia. Just like ESB, this upgrade was largely expected and we expect limited spreads tightening.

Credit positive

10



Sandvik

Some key take-aways from Danske Banks navigating the Nordics seminar in Stockholm. Sandvik was presented by the CFO, Mats Backman who has been with the company since 2006. On Mining: Generally confirmed the view that we have i.e. that demand has stabilized at a low level and that demand for new equipment is weak. Mats noted that despite the decline in Metals prices production from existing mines is actually increasing and as such Sandvik is gaining back a bit of the lost ground on Opex related spending. Expansion of the aftermarket is key to take further advantage of this. The main risk in the mining segment currently, as Mr. Backman sees it, is if production levels would begin suffer, but so far not many signs of this happening. On Oil&Gas: According to Mats, Sandvik has around 8% exposure of which around half is upstream opex related (Varel) and the other half is larger late-cycle energy projects (Materials technology). The brunt of the pain from the lower oil price is currently felt in Varel which seems to have taken a further hit on the orderbooks during the second quarter. However should Oil prices remain low the late-cycle part of the business could also take a hit towards the end of the year. This is not a huge negative from a credit perspective given the share of overall revenues, but still. On the credit rating / M&A: When asked on M&A by the audience (a room full of equity investors) Mats first reply was that the balancesheet of Sandvik is currently not strong enough to support any large scale M&A and that the group must focus on maintaining its credit rating. This supports our thesis that the current negative outlook from S&P's will not result in a downgrade and we maintain our Overweight recommendation as we think, especially the longer dated bonds, look attractive at current spreads.

Credit neutral

SAAB

From navigating the Nordics seminar. Positively, for the first time in 12 months the Group experience that defence budgets increase rather than decrease (not that surprisingly due to the political situation in Eastern Europe and some parts of Asia). Sweden, which accounts for a significant part of SAAB’s sales, has proposed increased defence budgets for the first time in more than 10 years and will likely buy two submarines from the Group during this year (as I understand it this was conditional in the Kockums acquisition). The CFO was optimistic about the contracts in Brazil and expect it to be signed during the summer or possibly early autumn. If/when signed this would take the order backlog from today’s about SEK50bn to above SEK100bn. Further, he talked about the school fighters (aircraft's) that USA currently looking at and where SAAB is one of the preferred partners. He said that the deal should be done within 18-24 months and be approximately 350 planes, initially. If SAAB would get this order it could potentially be larger in terms of sales than the flagship fighter Gripen. The strategy remain with an aim of getting closer to the customers and be an integrated part of the R&D process which should result in higher quality, lower costs and improved efficiency. The outlook for 2015 was reiterated at 5% growth in sales with unchanged EBIT margins compared to 2014. Overall slightly credit positive due to the stronger underlying market and the pipeline of several potential major orders in the coming years (Brazil, USA, India, Finland)

Credit neutral

11



Nibe

No big news from the Company on the Navigating the Nordics seminar. The market for heat pumps in Europe continue to be challenging. Some signs of improvements in Sweden during the last month. The potential reduction of the tax deduction (Swedish: “Rutavdrag”) that can be implemented in 2016 could be one explanation. Synergies from the acquisitions in the North American operation is expected to kick in gradually during the next 12-18 months following better streamlining of the purchasing/logistic/sourcing units. Nothing new regarding M&A, but as I read it they would like to increase the share of sales outside Europe in especially the Stoves business area. Further, the CEO makes a very solid impression and said he was confident that they will increase their margins slightly during the year (especially in the Stoves business area which has suffered and not achieved 10% in EBIT margin since 1993). Overall Credit neutral.

Credit neutral

Stockmann

The Stockmann Group's sales amounted to EUR126.7m in May 2015. Sales were down by 12.5% y/y at comparable exchange rates. Euro-denominated sales were down by 15.3% y/y. May had one sales day less than in the previous year in many units due to the timing of Whit Sunday. The sales figures came in below consensus which was -9% y/y on the group level showing that Stockmann is still struggling with weak demand in Finland and the weak rouble. Intradivisionally sales were down in -13%y/y in Stockmann Retail (vs DBMe -9%) and Lindex -6% (vs DBMe -4%). Overall credit negative but we still maintain our 'B+' rating on the name.

Credit negative

Scania and Volvo

Scania's head of sales, Henrik Henriksson, has stated that the Q2 sales in Europe looks 'strong' compared to Q1. This bodes well for both Scania and Volvo who both have around the same market share in Europe c. 17 % each. Credit positive

12

.


Selected new issues

Selected new issues

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

12-06-2015 Specialfastigheter Sveri STIB3M +30bps SEK 300 m Dec-17 AA+ / / 30

12-06-2015 City Of Ostersund STIB3M +43bps SEK 400 m Jun-20 AA+ / / 43

26-05-2015 Castellum Ab STIB3M +82bps SEK 550 m Jun-18 / / 82

11-06-2015 City Of Lidingo STIB3M +40bps SEK 200 m Jun-17 / / 40

25-03-2015 Corem Property Grp Ab STIB3M +350bps SEK 650 m Apr-18 / / 350

09-06-2015 Ikano Bank Ab STIB3M +105bps SEK 400 m Jun-20 / / 105

09-04-2015 Skandiabanken Ab STIB3M +60bps SEK 1 600 m Oct-17 / Aaa / 60

15-06-2015 Kristiansund Norway 1.59% NOK 324 m Sep-15 / /

12-06-2015 Statnett Sf 1.45% NOK 500 m Oct-15 / /

13

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

14

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)

15

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

16

Chart pack: fund flows Europe, net sales


Sweden, net sales

US, net sales

Norway, net sales

17

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


Euro area y/y change in bank lending

Purchasing Manager Indices

Euro area lending standards

18

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 Emil HjalmarssonAmbu 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

19



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- Baa1 Stable 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 Børsting MARKETWEIGHTHoist 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 OVERWEIGHTKemira Oyj BBB- Stable Wr Mads RosendalKesko 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 Rosendal MARKETWEIGHTMetso Oyj BBB Stable Baa2 Stable Mads Rosendal MARKETWEIGHTNcc Ab BBB- Stable Emil HjalmarssonNeste Oil Oyj BBB- Stable Jakob Magnussen OVERWEIGHT


20



Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookNibe Industrier Ab BBB- Stable Emil HjalmarssonNokia Oyj BB+ Pos Ba2 Stable BB Pos Ola Heldal MARKETWEIGHTNokian 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+ 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 Pos Mads RosendalPohjola Bank Oyj AA- Neg Aa3 Stable A+ Stable T. Hovard / L. Holm MARKETWEIGHTPosten Norge As A- Stable Ola HeldalPostnord Ab BBB+ Stable Gabriel BerginProsafe Se BB Stable Sondre StormyrRamirent Oyj BB+ Stable Brian BørstingSandnes 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- Stable B+ Sondre StormyrSecuritas Ab BBB Pos Wr Brian Børsting MARKETWEIGHTSkandinaviska Enskilda Banken Ab A+ Neg A1 A+ Pos T. Hovard / L. Holm OVERWEIGHTSkanska Ab BBB+ Stable Emil Hjalmarsson


21



Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookSkf Ab BBB Stable Baa1 Neg Mads Rosendal UNDERWEIGHTSognekraft 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 T. Hovard / L. HolmSparebank 1 Nord Norge A1 Stable A Stable T. Hovard / L. Holm UNDERWEIGHTSparebank 1 Smn A1 Stable A- Stable T. Hovard / L. Holm MARKETWEIGHTSparebank 1 Sr-Bank Asa A1 Stable 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 Stable 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 Ripa


22


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


Analyst(s)

Company Rating Outlook Sr. Unsec Rating Outlook Rating Outlook Rating OutlookTdc A/S BBB Neg Baa3 Stable BBB Neg Ola Heldal MARKETWEIGHTTechnopolis Oyj BB+ Stable BB Louis LandemanTeekay 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- 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 RøedWihlborgs Fastigheter Ab BB+ Stable BB Louis LandemanYit Oyj B Stable Emil Hjalmarsson


23

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]

mailto:[email protected]















24

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 Niklas Ripa, 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



25

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.

26

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.