weekly credit update · issuer profile - cargotec cargotec is a global provider of cargo-handling...

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Investment Research — General Market Conditions

Headlines

Risk-on market sentiment and tighter credit indices

Euro rates down after ECB meeting despite no new easing measures being announced

Issuers continue to print as ‘sell-side’ warns over risk-return for junk bonds

Market commentary

The markets have been in a risk-on mood this week as US, European and Asian stock

markets have all trended higher. The S&P 500 reached record closes on the back of an

upbeat ISM manufacturing report, signs of a labour market rebound in the ADP report

and a continued dovish tone from Fed Chairman Janet Yellen, in her speech on Monday.

Benchmark treasury yields are at 10-year highs ahead of the non-farm payrolls report

today. A figure around 200,000 and a decline in the unemployment rate (our expectation),

should lead to further upside risks to US rates. Stronger market sentiment was also

evidenced by the iTraxx Europe tightening around 6 points and the iTraxx Crossover

tightening some 13 points during the week.

In the euro market, all eyes have again been on Mario Draghi and the ECB meeting on

Thursday. The EONIA curve remained inverted ahead of the meeting in expectation of

dovish comments from Draghi, following low inflation readings in recent months.

Although no new easing measures were announced, Mario Draghi still managed to talk

down EUR rates across the curve and to support peripheral government bond markets.

For now, EUR rates are likely to remain within recent tight ranges with no clear direction

while the ECB contemplates further easing measures. Meanwhile, low underlying rates

will continue to be supportive for credits.

The market for new issues remains strong and corporates and financials continue to tap

the bond market at tighter spreads. As investors continue to pour money into higher-

yielding assets, a number of sell-side banks and brokerages, including BNP Paribas,

Citigroup, RBS and GMP Securities, have warned that yields on some junk bonds have

now reached levels that no longer compensate investors for the higher risk associated

with the securities (FT reports). Whether further spread compression will stabilise or

revert remains to be seen, but thus far, credit markets remain in a high gear both in

Europe and the Scandi markets.

Table 1. Selected new EUR and Scandi issues

Name Rating (Bond ) Coupon Tenor Spread Size

SSAB AB (EUR) BB 3,9 % 5,0 MS + 296 350 Elia System Operator (EUR) A- 3,0% 15,0 MS + 82 350 Wal-Mart (EUR) Aa2/AA/AA 1,9 % 8,0 MS + 43 850 Wal-Mart (EUR) Aa2/AA/AA 2,6 % 12,0 MS + 58 650 Skanska* (SEK) BBB+ 1,9 % 5,0 STIB + 95 850 NCC* (SEK) BBB- 2,8% 4,5 STIB + 185 550 Norwegian Property* (NOK) BBB 3,0 % 5,0 NIB + 130 350

Source: Bloomberg *Danske indicative rating. 3M NIBOR/STIBOR benchmark used for NOK/SEK issues

4 April 2014

Analyst Nils Aspeli +47 85 40 84 33 [email protected]

Weekly Credit Update

Contents

Market commentary 1

Selected charts 2

Recently published research 4

Official and shadow ratings 7

iTraxx Crossover (high yield)

Source: Bloomberg, Danske Bank Markets

iTraxx Europe (investment grade)

Source: Bloomberg, Danske Bank Markets

mailto:[email protected]

2 | 4 April 2014 www.danskeresearch.com

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EUR investment grade cash spreads (ASW) EUR high yield cash spreads (ASW)

Source: Danske Bank Markets Source: Danske Bank Markets

iTraxx (Europe) vs CDX (US) iTraxx curve spreads


Nordic corporates vs iTraxx Nordic banks 5y CDS spreads



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Corporate BBB bond yield vs EuroSTOXX dividend yield 3M Libor OIS spreads


Financials spread vs non-financials (Industrials), A-rated

Source: Danske Bank Markets


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Recently published research

Issuer Profile - Cargotec

Cargotec is a global provider of cargo-handling solutions. The company’s products are

used in ships, ports, terminals, distribution centres, heavy industry and in on-road load

handling. The company has a leading market position and its extensive and deep industry

expertise is reflected in long-lasting customer relationships including companies such as

the Grimaldi Group and DPW. Cargotec generated revenues of EUR3.2bn and EBITDA

of EUR203m in 2013. We assign a ‘BBB-’ credit rating to the company, assessing the

business risk as ‘Satisfactory’ with and ‘Intermediate’ financial risk profile in rating

agency terms.


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Ratings from Standard & Poor’s, Moody’s and Fitch and Danske Bank Markets shadow ratings

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

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 OutlookAkelius Fastigheter Ab BB+ Pos BB Louis LandemanAmbu A/S BBB- Stable Jakob MagnussenAp Moeller - Maersk A/S BBB+ Stable Baa1 Stable Brian Børsting BUYArla Foods Amba BBB+ Stable Mads RosendalAtlas Copco Ab A Stable A2 Stable Mads Rosendal SELLAvinor As AA- Stable A1 Stable Åse Haagensen HOLDBwg Homes Asa BB Stable BB- Nils AspeliCarlsberg Breweries A/S Baa2 Stable BBB Stable Brian Børsting SELLColor Group As BB- Stable B+ Kasper F. LarsenDanske Bank A/S A- Stable Baa1 Pos A StableDlg Finance As BB- Stable Mads RosendalDfds A/S BB+ Stable Kasper F. LarsenDna Ltd BBB- Stable Kasper F. LarsenDnb Bank Asa A+ Stable A1 Stable T. Hovard / L. Holm HOLDDong Energy A/S BBB+ Neg Baa1 Stable BBB+ Neg Jakob Magnussen BUYDsv A/S BBB Stable Brian BørstingEg Holding B Stable Jakob MagnussenElectrolux Ab BBB+ Neg Wr WD Brian Børsting HOLDElisa Oyj BBB Stable Baa2 Stable Kasper F. Larsen BUYFinnair Oyj BB Stable Brian BørstingFingrid Oyj AA- Stable A1 Stable A+ Stable Jakob Magnussen BUYFortum Oyj A- Neg A2 Neg A- Neg Jakob Magnussen SELLFred Olsen Energy Asa BB+ Stable Åse HaagensenG4S Plc BBB- Stable Brian Børsting BUYGetinge Ab BBB- Stable Louis LandemanHemso Fastighets Ab BBB+ Stable Wiveca SwartingHusqvarna Ab BBB- Stable Louis LandemanInvestor Ab AA- Stable A1 Stable Brian Børsting BUYIss A/S BB Pos B1 Pos Brian Børsting HOLDJernhusen Ab A- Stable Gabriel BerginJ Lauritzen A/S B Stable B- Åse HaagensenJyske Bank A/S A- Stable Baa1 Stable Thomas M. Hovard BUYKesko Oyj BBB Stable Mads RosendalMeda Ab BB Pos Louis LandemanMetso Oyj BBB Stable Baa2 Neg Mads Rosendal BUYMjolby-Svartadalen Energi Ab BBB+ Watch Louis LandemanNcc Ab BBB- Stable Louis LandemanNeste Oil Oyj BBB- Stable Jakob Magnussen HOLDNokia Oyj B+ B1 Develop BB- Kasper F. Larsen HOLDNokian Renkaat Oyj A- Stable Jakob MagnussenNordea Bank Ab AA- Neg Aa3 Stable AA- Stable T. Hovard / L. Holm SELLNorth Atlantic Drilling Ltd BB Stable BB- Åse HaagensenNorwegian Property Asa BBB- Stable Nils AspeliNykredit Bank A/S A+ Neg Baa2U Neg A Stable T. Hovard / L. Holm BUYOdfjell Se B+ Stable B Bjørn Kristian RøedOlav Thon Eiendomsselskap Asa BBB+ Stable Nils AspeliOlympic Shipping As B+ Stable B Åse HaagensenOutokumpu Oyj B- Pos Mads RosendalOrkla Asa BBB+ Pos Nils AspeliPohjola Bank Plc AA- Aa3 Stable A+ Stable T. Hovard / L. Holm SELLPostnord Ab BBB+ Stable Gabriel BerginProsafe Se BB Stable Åse HaagensenRamirent Oyj BB+ Stable Brian BørstingSaab Ab BBB+ Stable Wr Wiveca SwartingSampo Baa2 Stable T. Hovard / L. Holm HOLDSandnes Sparebank BBB+ Stable T. Hovard / L. Holm HOLDSandvik Ab BBB Mads Rosendal HOLDSas Ab B- Stable Wr Pos Brian BørstingSbab Bank Ab A Neg A2 T. Hovard / L. Holm HOLDScania Ab A- Pos Mads Rosendal HOLDSchibsted Asa BBB Stable Nils AspeliSeadrill Ltd BB+ Stable BB Åse HaagensenSecuritas Ab BBB Stable Wr Brian Børsting HOLDSkandinaviska Enskilda Banken Ab A+ Neg A1 Stable A+ Stable T. Hovard / L. Holm BUYSkanska Ab BBB+ Stable Louis LandemanSkf Ab BBB+ Stable Baa1 Stable Mads Rosendal BUYSparebank 1 Nord Norge A2 Stable A Stable T. Hovard / L. Holm HOLDSparebank 1 Smn A2 Stable A- Stable T. Hovard / L. Holm HOLDSparebank 1 Sr Bank Asa A2 Stable A- Stable T. Hovard / L. Holm HOLDSpar Nord Bank A/S BBB+ Stable T. Hovard / L. HolmSponda Oyj BBB- Stable Louis LandemanStatkraft Sf A- Stable Aaa Stable Jakob Magnussen BUYStatnett Sf A+ Stable Wr Stable Jakob Magnussen HOLDStatoil Asa AA- Stable Aa2 Stable Jakob Magnussen SELL

Recomm.S&P Moody's FitchDanske Bank


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Ratings from Standard & Poor’s, Moody’s and Fitch and Danske Bank Markets shadow ratings

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

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 OutlookStena Ab BB Stable B2 Stable Brian Børsting BUYStockmann Oyj Abp BB- Stable Mads RosendalStolt-Nielsen Ltd BB+ Stable BB Bjørn Kristian RøedStora Enso Oyj BB Stable Ba2 Neg BB- Stable Mads Rosendal HOLDSuomen Hypoteekkiyhdistys A- Stable T. Hovard / L. HolmSwedavia Ab A- Stable Gabriel BerginSwedbank Ab A+ Stable A1 Stable A+ Stable T. Hovard / L. Holm BUYSwedish Match Ab BBB Stable Baa2 Stable Brian Børsting HOLDSvenska Cellulosa Ab Sca BBB+ Pos Baa1 Stable Mads Rosendal SELLSvensk Fastighetsfinansiering Ab BBB Stable Louis LandemanSvenska Handelsbanken Ab AA- Neg Aa3 Stable AA- Stable T. Hovard / L. Holm HOLDSydbank A/S Baa1 Stable T. Hovard / L. Holm HOLDTallink Group As BB Stable BB- Jakob MagnussenTalvivaara Mining Co Plc C Mads RosendalTdc A/S BBB Pos Baa2 Stable BBB Stable Kasper F. Larsen BUYTeekay Offshore Partners Lp BB- Stable B+ Kasper F. LarsenTele2 Ab BBB Stable Kasper F. LarsenTelefonaktiebolaget Lm Ericsson BBB+ Neg A3 Neg BBB+ Neg Kasper F. Larsen HOLDTelenor Asa A- Pos A3 Stable Kasper F. Larsen HOLDTeliasonera Ab A- Stable A3 Stable A- Stable Kasper F. Larsen SELLTeollisuuden Voima Oyj BBB Stable Wr BBB Stable Jakob Magnussen BUYThon Holding As BBB+ Stable Nils AspeliUpm-Kymmene Oyj BB Stable Ba1 Stable BB Stable Mads Rosendal HOLDVasakronan Ab BBB+ Stable Louis LandemanVattenfall Ab A- Stable A3 Stable A- Neg Jakob Magnussen HOLDVestas Wind Systems A/S BBB- Pos Kasper F. Larsen BUYVolvo Ab BBB Neg Baa2 Neg BBB Stable Mads Rosendal BUYWilh Wilhelmsen Asa BBB- Stable Bjørn Kristian RøedYit Oyj BB Neg Louis Landeman

Recomm.Danske Bank S&P Moody's Fitch


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Henrik René Andresen

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

Brian Børsting

Industrials (+45) 45 12 85 19 [email protected]

Mads Rosendal

Industrials, Pulp & Paper (+45) 45 14 88 79 [email protected]

Lars Holm

Financials (+45) 45 12 80 41 [email protected]

Jakob Magnussen

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

Åse Haagensen

High Yield, Industrials (+47) 22 86 13 22 [email protected]

Fixed Income Credit Research

Louis Landeman

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

Thomas Hovard

Head of Credit Research (+45) 45 12 85 05

[email protected]

Find the latest Credit Research

Danske Bank Markets: Bloomberg: http://www.danskebank.com/danskemarketsresearch DRCR<GO>

Gabriel Bergin

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

Kasper From Larsen

High Yield, TMT (+45) 45 12 80 47 [email protected]

Bjørn Kristian Røed

Shipping (+47) 85 40 70 72 [email protected]

Nils Henrik Aspeli

Real Estate, Industrials (+47) 85408433 [email protected]

Wiveca Swarting

Real Estate, Construction (+46) 8 568 80617 [email protected]

Sondre Dale Stormyr

Offshore rigs (+47) 85 40 70 70 [email protected]









http://www.danskebank.com/danskemarketsresearch








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weekly credit update · issuer profile - cargotec cargotec is a global provider of cargo-handling...

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