High Yield Highlights - uge 37. Univeg overgjort russisk risici. Bombardier genoptagning af testflyvning

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1 High Yield Highlights - uge 37 Univeg - Køb Ineos - Køb Univeg overgjort russisk risici Intakt investeringscase med høj rente vi fastholder vores Køb anbefaling En overgjort risiko i forhold til Ruslands sanktioner mod EU gør at investeringscasen er intakt og muliggør et rekordhøjt absolut afkastpotentiale i udstedelsen. Grundet deres forretningsmodels gode tilpasningsevne, høje diversificeringsgrad i forhold til segmenter og geografiske spredning mener vi, at kreditmarkedet overvurderer disse risici i relation til Univeg. Vi fastholder vores Køb anbefaling. Klik her for at komme til analysen Ineos udfald på skotsk valg uden betydning for Grangemouth Udfaldet på det forestående skotske valg vil ikke påvirke investeringscasen vi fastholder vores Køb anbefaling Ineos har udtalt sig i PRW (Britisk branchemedie for kemi mv.) at uanset udfaldet på det skotske forestående valg, vil det ikke påvirke casen omkring Grangemouth raffinaderiet. Der er fornylig investeret GBP 3 mio. til at etablerer LNG faciliteter der forventes i drift fra 216 og de +1 FTE har genforhandlet kontrakter sidste år. Vi gentager vores anbefaling Køb. Bombardier - Køb Bombardier genoptagning af testflyvning Bombardier genoptager testflyvning af CSeries vi fastholder vores Køb anbefaling Bombardier har genoptaget testflyvningen af deres CSereies model. Testflyvningen var ventet og den er afgørende for selskabets ambition om at levere de første fly i H2 15. Vi fastholder vores Køb anbefaling. Bombardier - Køb Bombardier optrapning af russiske sanktioner kan give problemer Rygter om udskydelse af aftale med Rostech om Q-4 fly vi fastholder vores Køb anbefaling Den russiske avis Vedomosti rapporterer, at der er rygter om en udskydelse af samarbejdet med Rostech om at bygge Q-4 fly i den russiske by Ulyanovsk. I forlængelse af optrapning af sanktioner i forbindelse med krisen i Ukraine vil det ikke komme som en overraskelse, hvis rygterne taler sandt, og Bombardier må udskyde projektet. Vi fastholder dog vores Køb anbefaling. Reseach team: Jens Houe Thomsen Bo Andersen Rasmus Justesen Disclaimer & Disclosure: Please see the last page jht@jyskebank.dk boandersen@jyskebank.dk rasmus.justesen@jyskebank.dk 1 of 11

2 Spread Developments Change Change Spread/Rate 1 Week 1 Month 3 Month Ytd Spread/Rate 1 Week 1 Month 3 Month Ytd EUR High Yield non. Fin (HEAD) 377 bp. 3 bp. -2 bp. 62 bp. 8 bp. US High Yield non. Fin (HNF) 417 bp. 12 bp. bp. 61 bp. 6 bp. EUR High Yield (HE) 361 bp. 2 bp. -21 bp. 61 bp. 5 bp. US High Yield (HA) 45 bp. 12 bp. -2 bp. 59 bp. 5 bp. itraxx Xover (Generic) 242 bp. 16 bp. -42 bp. 11 bp. -46 bp. CDX High Yield 33 bp. 15 bp. -1 bp. 28 bp. 18 bp. EUR Invest. Grade non. Fin. (EN) 88 bp. -1 bp. -8 bp. -5 bp. -18 bp. US Invest. Grade non. Fin. (CFX) 115 bp. 1 bp. bp. 4 bp. -15 bp. EUR Invest. Grade (ER) 95 bp. bp. -9 bp. -4 bp. -21 bp. US Invest. Grade (CA) 114 bp. 2 bp. bp. 5 bp. -13 bp. itraxx Europe Invest. Grade 59 bp. 4 bp. -9 bp. bp. -11 bp. CDX Invest. Grade 59 bp. 3 bp. -4 bp. 1 bp. -4 bp. itraxx Sr Financial 59 bp. 3 bp. -14 bp. -1 bp. -26 bp. US 1Y 2.55% 9 bp. 1 bp. -9 bp. -44 bp. itraxx Sub Financial 8 bp. 5 bp. -19 bp. -9 bp. -48 bp. German 1Y 1.4%. 11 bp. -2 bp. -36 bp. -9 bp. bp 2,5 2, 1,5 1, 5 EUR HY vs. US HY Spread development bp Difference (rhs) EUR HY (HEAD) US HY (HNF) bp EUR IG vs. US IG Spread development bp Difference (rhs) EUR HG (EN) US HG (CFX) Source: Bloomberg & Merrill Lynch & Jyske Bank 2 of 11

3 High Yield Bond Outperformers and Underperformers - Spread to Worst 1 Week Outperformers 1 Month Outperformers Issue Rating Price STW Change Issue Rating Price STW Change SPIE BONDCO 3 SCA 11% 219 CCC TVN FINANCE CORP III AB 7.875% 218 B XELLA HOLDCO FINANCE 9.125% 218 B EUROPCAR GROUPE SA 9.375% 218 CCC TAKKO LUX 2 SCA 9.875% 219 B , CMA CGM 8.875% 219 CCC PEUGEOT SA 6.875% 216 B UNITYMEDIA KABELBW GMBH 9.625% 219 B UNITYMEDIA KABELBW GMBH 9.625% 219 B CIRSA FUNDING LUXEMBOURG 8.75% 218 B TVN FINANCE CORP III AB 7.875% 218 B CAMPOFRIO FOOD SA 8.25% 216 BB GOODYEAR DUNLOP TIRES 6.75% 219 BB GOODYEAR DUNLOP TIRES 6.75% 219 BB PEUGEOT SA 5% 216 B CONVATEC HEALTHCARE 1.875% 218 B PORTUCEL SA 5.375% 22 BB INFOR US INC 1% 219 CCC UNITYMEDIA HESSEN / NRW 5.125% 223 BB AG SPRING FINANCE II LTD 9.5% 219 CCC , CONVATEC HEALTHCARE 1.875% 218 B SPIE BONDCO 3 SCA 11% 219 CCC UNITYMEDIA HESSEN / NRW 5.75% 223 BB UNITYMEDIA HESSEN / NRW 7.5% 219 BB Week Underperformers 1 Month Underperformers Issue Rating Price STW Change Issue Rating Price STW Change NEW WORLD RESOURCES NV 7.875% 221 D 5. 19, NEW WORLD RESOURCES NV 7.875% 221 D 5. 19,579 13,197 GEO TRAVEL FINANCE 1.375% 219 CCC , HECKLER & KOCH GMBH 9.5% 218 CCC , IRON MOUNTAIN INC 6.75% 218 B NEW WORLD RESOURCES NV 7.875% 218 CCC ,88 88 GEO DEBT FINANCE SCA 7.5% 218 B , EDCON HOLDINGS PTY LTD % 219 CCC , R&R PIK PLC 9.25% 218 CCC GEO TRAVEL FINANCE 1.375% 219 CCC , MATTERHORN FIN & CY SCA 9% 219 CCC GEO DEBT FINANCE SCA 7.5% 218 B ,56 46 BOARDRIDERS SA 8.875% 217 B , R&R PIK PLC 9.25% 218 CCC PICARD BONDCO 9% 218 B NORSKE SKOGINDUSTRIER 7% 217 CCC , CAMPOFRIO FOOD SA 8.25% 216 BB EDCON PTY LTD 9.5% 218 B , NORSKE SKOGINDUSTRIER 7% 217 CCC , EDCON PTY LTD 9.5% 218 B , LABCO SAS 8.5% 218 B UNILABS SUBHOLDINGS AB 8.5% 218 B ONTEX IV 9% 219 CCC ZIGGO BOND CO 8% 218 BB Source: Merrill Lynch & Jyske Bank 3 of 11

4 High Yield Bond Outperformers and Underperformers - Price 1 Week Outperformers 1 Month Outperformers Issue Rating STW Price Change Issue Rating STW Price Change TAKKO LUX 2 SCA 9.875% 219 B3 1, ORIGIN ENERGY FINANCE LT 7.875% 218 BB WIENERBERGER AG 6.5% 217 B AG SPRING FINANCE II LTD 9.5% 219 CCC1 1, SPIE BONDCO 3 SCA 11% 219 CCC UNITYMEDIA HESSEN / NRW 6.25% 229 BB CIR SPA 5.75% 224 BB VIVACOM 6.625% 218 B OTE PLC 3.5% 22 BB CMA CGM 8.75% 218 CCC UNITYMEDIA HESSEN / NRW 6.25% 229 BB CMA CGM 8.875% 219 CCC UNITYMEDIA HESSEN / NRW 5.125% 223 BB TELECOM ITALIA SPA 5.25% 222 BB UNITYMEDIA HESSEN / NRW 5.625% 223 BB ABENGOA FINANCE SAU 6% 221 B UNITYMEDIA HESSEN / NRW 5.75% 223 BB AUTODIS SA 6.5% 219 B FINMECCANICA SPA 4.875% 225 BB OTE PLC 3.5% 22 BB PEUGEOT SA 6.875% 216 B TELECOM ITALIA FIN SA 7.75% 233 BB HEIDELBERGCEMENT FIN LUX 7.5% 22 BB TRIONISTA TOPCO GMBH 6.875% 221 CCC Week Underperformers 1 Month Underperformers Issue Rating STW Price Change Issue Rating STW Price Change GEO TRAVEL FINANCE 1.375% 219 CCC1 1, GEO TRAVEL FINANCE 1.375% 219 CCC1 1, GEO DEBT FINANCE SCA 7.5% 218 B2 1, HECKLER & KOCH GMBH 9.5% 218 CCC2 1, BOARDRIDERS SA 8.875% 217 B3 1, EDCON HOLDINGS PTY LTD % 219 CCC2 2, BUT SAS 7.375% 219 B GEO DEBT FINANCE SCA 7.5% 218 B2 1, MANUTENCOOP FACILITY 8.5% 22 B NEW WORLD RESOURCES NV 7.875% 218 CCC3 2, UNIVEG HOLDING BV 7.875% 22 CCC NEW WORLD RESOURCES NV 7.875% 221 D 19, FINANCIERE GAILLON 8 SAS 7% 219 B EDCON PTY LTD 9.5% 218 B3 1, UNILABS SUBHOLDINGS AB 8.5% 218 B EDCON PTY LTD 9.5% 218 B3 1, THOM EUROPE SAS 7.375% 219 B UNIVEG HOLDING BV 7.875% 22 CCC HOLDIKKS SAS 6.75% 221 B UNILABS SUBHOLDINGS AB 8.5% 218 B BOING GROUP FINANCING 6.625% 219 B NORSKE SKOGINDUSTRIER 7% 217 CCC2 2, AG SPRING FINANCE LTD 7.5% 218 B BOARDRIDERS SA 8.875% 217 B3 1, Source: Merrill Lynch & Jyske Bank 4 of 11

5 Issuance - EUR Source: Merrill Lynch & Jyske Bank 5 of 11

6 European Issuance - EUR, USD & GBP Source: Merrill Lynch & Jyske Bank 6 of 11

7 Spread vs. GDP US GDP Growth & High Yield Spread bp. % -1 2,1-8 1, , High Yield Spread (HA) US GDP YoY (rhs, inverted) Bloomberg consensus EUR High Yield Spread vs. GDP Growth bp. % -6 2,1-4 1,6-2 1, High Yield Spread (HEAD) Euro GDP YoY (rhs, inverted) bp. 2, 1,5 GDP Growth & High Yield (since 25) y = e -.92x R² =.364 bp. 2,5 2, High Yield vs. GDP Growth next Quarter (since 25) y = 633.4e -.18x R² = , 1,5 1, % 8 % 6 % 4 % 2 % % 2 % 4 % 6 % 8 % US GDP YoY Q4'13E GDP Growth Q2'13 GDP Growth 6 % 4 % 2 % % 2 % 4 % 6 % Euro GDP YoY Q1'14E GDP growth Q3'13 GDP Growth Source: Bloomberg, Merrill Lynch & Jyske Bank 7 of 11

8 Rating Drift Source: Moodys & Jyske Bank 8 of 11

9 Disclaimer & Disclosure Jyske Bank s corporate bond recommendations current breakdown Jyske Bank is supervised by the Danish Financial Supervisory Authority. The research report is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any responsibility for the correctness of the material nor any liability for transactions made on the basis of the information or the estimates of the report. The estimates and recommendations of the research report may be changed without notice. The report is for the personal use of Jyske Bank's customers and may not be copied. This report is an investment research report. Conflicts of interest Jyske Bank has prepared procedures to prevent and preclude conflicts of interest thus ensuring that research reports are being prepared in an objective manner. These procedures have been incorporated in the business procedures covering the research activities of Jyske Markets, a business unit of Jyske Bank. Jyske Bank's corporate-bond analysts may not hold positions in the instruments for which they prepare research reports. If an analyst takes over for the responsible analyst in connection with illness, business travels, etc. this analyst cannot trade in the relevant corporate bond on the day of publication of the research report and the following day. Jyske Bank may, however, hold positions, have interests in or business relations with the companies that are analysed. The research report has not been presented to the company prior to its release. Analysts receive no payment from persons interested in individual research reports. Read more about Jyske bank's policy on conflicts of interest at Jyske Bank's corporate bond recommendations - current breakdown Breakdown of recomendations, corporate bonds (number) STRONG BUY BUY HOLD SELL 9 of 11

10 Financial models Jyske Bank models the expected development of the analysed company s income statement and balance sheet. A number of key figures for the company is calculated on the basis of these models, and the key figures are compared with those of comparable companies and the company s past performance. From this we infer the spread at which the bonds will trade for the period ahead. The recommendation and the price target are moreover adjusted for the expected news flow and the market sentiment based on knowledge of the industry and company-specific circumstances. Jyske Bank s recommendations take into account the expected development in the corporate-bond market, the various sectors and company-specific circumstances. Risk Investment in this corporate bond is associated with risk. The risk can be measured directly via the spread at which the bond trades relative to a risk free investment with the same maturity. The spread reflects the probability of default, the recovery rate, and the liquidity of the corporate bond. Movements in the credit market, the sector and/or news flows, etc. regarding the company may affect the price of the bond. See the front page of the research report for our view of the risk associated with the corporate bond. The risk on the corporate bond is stated as Very Low, Low, Medium, High or Very High and is relative to the high-yield market for corporate bonds. The risk factors stated and/or calculations of sensitivities in the research report are not to be considered all-encompassing. If the corporate bond is denominated in a currency other than the investor s base currency, the investor accepts an FX risk. Update of the research report The planned update of the report will be prepared immediately upon the release of the company s financial statements. In addition, there may be prepared research reports on special themes specifically for the company or research reports where the company is part of the special theme. These research reports are published on an ad-hoc basis. See the front page for the initial date of publication of the report. The prices stated are the latest prices quoted by Jyske Bank before the publication of the research report, unless otherwise stated. Recommendation concepts Our recommendations are based on market developments and an assessment of the expected return within the next twelve months. A BUY recommendation or a Strong BUY recommendation is based on expectations that investment in the bond will generate a return above that of the general corporate-bond market. On the other hand, a SELL recommendation implies that we expect investment in the bond to generate a return below that of the general corporate-bond market. Since our recommendations are relative and risk-adjusted, it is possible to compare our recommendations across sectors and risk categories. In addition, the potential is stated in absolute terms via our return target. 1 of 11

11 Contacts for Institutional Customers Ulrik Øllegaard Bøg Hansen Head of Corporate Bonds Sales, Vice President Nicolaj Brask Christiansen Senior Sales Manager, Corporate Bonds Sales René Søndergaard Vinther Sales Manager, Corporate Bonds Sales of 11