29-8-214 High Yield Highlights - uge 35 Ontex - Hold Ontex har aflagt Q2'14 regnskab Vi fastholder vores Hold anbefaling af Ontex udstedelsen efter et flot regnskab. Ontex leverer igen et super regnskab. Omsætningen stiger 7,3 % LFL til EUR 416,2mio. EBITDA marginen forbedres med 58 bps. til 12,1 % (år/år), og det frie cash flow er positivt med EUR 4,7mio. hvilket er en fremgang på 8,5 %. Den finansielle gearing falder til 3x ND/EBITDA. Vi fastholder vores Hold anbefaling, da vi forventer førtidsindfrielse. Dong Energy - Køb Verisure - Hold Numericable - Køb Dong Energy har aflagt Q2'14 regnskab Vi fastholder anbefalingen Køb på de to 313 hybrider, mens vi sænker anbefalingen på 35 udstedelsen til Hold, da den forventes kaldt i 215. Dong Energy har offentliggjort Q2'14 regnskab, hvor de to store segmenter E&P og Windpower førte an i en forbedring af EBITDA. Vi har fortsat stor tillid til, at selskabet vil gennemføre sit betydelige investeringsprogram i de nærmeste år med skyldig hensyntagen til, at den nuværende rating skal fastholdes eller forbedres. Vi fastholder anbefalingen Køb på to af de tre hybrider fra Dong Energy, mens EUR 5,5 % @35 udstedelsen, som forventes kaldt 29/6-215 nedjusteres til Hold. Klik her for at komme til analysen Verisure har offentliggjort deres Q2'14 regnskab Vi fastholder vores Hold anbefaling af Verisure udstedelsen. Verisure har aflagt et Q2 14 regnskab, der viser en omsætningsfremgang på 7,6 % til EUR 217,6 mio. Den organiske vækst var på 9,9 %. Der har været en vækst i kundeporteføljen på 7,7 %. EBITDA margin ligger i Q2 14 på 35, % mod 35,7 % i Q2 13. Cash flow fra driften var EUR 69,4 mio. i Q2 14 mod EUR 65,1 mio. i Q2 13. Fremgangen skyldes både bedre indtjening og nedbringelse af arbejdskapitalen. Klik her for at komme til analysen Vi ændrer anbefaling til Køb (Stærkt Køb) på Numericable's 222 udstedelse Efter kreditspændet er kørt ind til tidligere niveauer, sænker vi anbefalingen på Numericable til Køb (Stærkt Køb) Numericable s 222 udstedelse blev opjusteret d. 5. august 214 til Stærkt Køb (Køb) efter en general kraftig spændudvidelse i markedet. Efter kreditspændet igen er kørt ind til tidligere niveauer, ændrer vi anbefalingen tilbage til Køb. Klik her for at komme til analysen Reseach team: Jens Houe Thomsen Bo Andersen Rasmus Justesen Disclaimer & Disclosure: Please see the last page +45 89 89 76 88 +45 89 89 76 87 +89 89 76 86 jht@jyskebank.dk boandersen@jyskebank.dk rasmus.justesen@jyskebank.dk 1 of 11
29-8-214 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) 361 bp. -5 bp. 14 bp. 34 bp. -8 bp. US High Yield non. Fin (HNF) 393 bp. 4 bp. 2 bp. 3 bp. -18 bp. EUR High Yield (HE) 351 bp. -4 bp. 12 bp. 38 bp. -5 bp. US High Yield (HA) 382 bp. 3 bp. 2 bp. 4 bp. -18 bp. itraxx Xover (Generic) 24 bp. -7 bp. -8 bp. -16 bp. -47 bp. CDX High Yield 39 bp. -4 bp. -15 bp. -6 bp. -3 bp. EUR Invest. Grade non. Fin. (EN) 92 bp. -2 bp. -2 bp. -5 bp. -14 bp. US Invest. Grade non. Fin. (CFX) 113 bp. bp. 3 bp. bp. -17 bp. EUR Invest. Grade (ER) 98 bp. -2 bp. -2 bp. -5 bp. -18 bp. US Invest. Grade (CA) 112 bp. bp. 3 bp. bp. -15 bp. itraxx Europe Invest. Grade 59 bp. -1 bp. -2 bp. -7 bp. -11 bp. CDX Invest. Grade 57 bp. -1 bp. -4 bp. -6 bp. -7 bp. itraxx Sr Financial 6 bp. -3 bp. -9 bp. -12 bp. -25 bp. US 1Y 2.34% -7 bp. -12 bp. -13 bp. -65 bp. itraxx Sub Financial 84 bp. -4 bp. -16 bp. -29 bp. -44 bp. German 1Y.88%. -1 bp. -24 bp. -47 bp. -16 bp. bp 2,5 2, 1,5 1, 5 EUR HY vs. US HY Spread development bp 35-15 7-28 7-29 7-21 7-211 7-212 7-213 7-214 Difference (rhs) EUR HY (HEAD) US HY (HNF) 3 25 2 15 1 5-5 -1 bp 7 6 5 4 3 2 1 EUR IG vs. US IG Spread development bp 5-3 7-28 7-29 7-21 Difference (rhs) 7-211 7-212 EUR HG (EN) 7-213 US HG (CFX) 7-214 -5-1 -15-2 -25 Source: Bloomberg & Merrill Lynch & Jyske Bank 2 of 11
29-8-214 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 MBL CHLGR INTER GRP SA 8.75% 219 B3 12.25 51-275 CATALENT PHARMA SOLUTION 9.75% 217 CCC1 11.76 5-78 SCHAEFFLER HLDG FIN BV 6.875% 218 B2 15.4 321-155 CAPSUGEL FINANCECO SCA 9.875% 219 B3 17.41-693 MATTERHORN FIN & CY SCA 9% 219 CCC1 12.25 657-147 INAER AVIATION FIN LTD 9.5% 217 B3 14.75-666 EUROPCAR GROUPE SA 9.375% 218 CCC2 16. 284-145 EUROPCAR GROUPE SA 9.375% 218 CCC2 16. 284-333 LABCO SAS 8.5% 218 B1 16. 351-141 MBL CHLGR INTER GRP SA 8.75% 219 B3 12.25 51-266 AG SPRING FINANCE II LTD 9.5% 219 CCC1 92.5 1,141-1 SCHAEFFLER HLDG FIN BV 6.875% 218 B2 15.4 321-183 CARLSON WAGONLIT BV 7.5% 219 B1 17.75 443-97 INFOR US INC 1% 219 CCC1 112. 23-155 INFOR US INC 1% 219 CCC1 112. 23-95 ZIGGO BOND CO 8% 218 BB3 14.13 475-154 NOVALIS SAS 6% 218 B1 15.25 297-91 CMA CGM 8.875% 219 CCC1 16.1 579-136 CMA CGM 8.875% 219 CCC1 16.1 579-85 HEIDELBERGCEMENT FIN LUX 2.25% 219 BB1 1.98 34-134 TAKKO LUX 2 SCA 9.875% 219 B3 93. 1,172-7 MATTERHORN FIN & CY SCA 9% 219 CCC1 12.25 657-13 HAPAG-LLOYD AG 9% 215 CCC1 12.58 596-7 VIVACOM 6.625% 218 B1 12.5 573-125 1 Week Underperformers 1 Month Underperformers Issue Rating Price STW Change Issue Rating Price STW Change NEW WORLD RESOURCES NV 7.875% 221 C 9. 1,182 3,279 NEW WORLD RESOURCES NV 7.875% 221 C 9. 1,182 4, R&R PIK PLC 9.25% 218 CCC1 12.2 68 464 EDCON HOLDINGS PTY LTD 13.375% 219 CCC2 78.38 2,44 436 ZIGGO BOND CO 8% 218 BB3 14.13 475 223 HAPAG-LLOYD AG 9% 215 CCC1 12.58 596 312 EDCON HOLDINGS PTY LTD 13.375% 219 CCC2 78.38 2,44 182 NEW WORLD RESOURCES NV 7.875% 218 CCC3 69. 2,149 3 ACCOR SA 4.125% 22 BB2 1. 377 145 LEVI STRAUSS & CO 7.75% 218 BB3 14. 46 259 SUNRISE COMMUNICATIONS H 8.5% 218 B3 15.5 437 115 CAMPOFRIO FOOD SA 8.25% 216 BB3 12.56 496 256 ORIGIN ENERGY FINANCE LT 7.875% 218 BB1 111.75 44 83 EDCON PTY LTD 9.5% 218 B3 94. 1,158 198 UNILABS SUBHOLDINGS AB 8.5% 218 B3 13.92 697 7 TVN FINANCE CORP III AB 7.875% 218 B1 14.38 534 18 NEW WORLD RESOURCES NV 7.875% 218 CCC3 69. 2,149 69 HECKLER & KOCH GMBH 9.5% 218 CCC2 95.52 1,93 172 MAGNOLIA BC SA 9% 22 B2 11.25 853 68 NORSKE SKOGINDUSTRIER 7% 217 CCC2 67. 2,311 17 HECKLER & KOCH GMBH 9.5% 218 CCC2 95.52 1,93 53 R&R PIK PLC 9.25% 218 CCC1 12.2 68 159 ZOBELE HOLDING SPA 7.875% 218 B2 14.75 555 48 EDCON PTY LTD 9.5% 218 B3 94.5 1,14 155 Source: Merrill Lynch & Jyske Bank 3 of 11
29-8-214 High Yield Bond Outperformers and Underperformers - Price 1 Week Outperformers 1 Month Outperformers Issue Rating STW Price Change Issue Rating STW Price Change ORIGIN ENERGY FINANCE LT 7.875% 218 BB1 44 111.75 5.4 VIVACOM 6.625% 218 B1 573 12.5 4.6 AG SPRING FINANCE II LTD 9.5% 219 CCC1 1,141 92.5 3.5 ORIGIN ENERGY FINANCE LT 7.875% 218 BB1 44 111.75 4. TAKKO LUX 2 SCA 9.875% 219 B3 1,172 93. 2.4 BRISA CONCESSAO RODOV SA 3.875% 221 BB1 235 16.42 2.6 TELECOM ITALIA FIN SA 7.75% 233 BB1 328 132.55 2.1 EDP FINANCE BV 4.125% 221 BB1 212 19.29 2.5 AG SPRING FINANCE LTD 7.5% 218 B2 756 99.57 1.5 CMA CGM 8.75% 218 CCC1 666 16. 2.2 DUFRY FINANCE SCA 4.5% 222 BB2 33 14.6 1.5 TELECOM ITALIA SPA 5.25% 222 BB1 282 112. 2.2 EDCON PTY LTD 9.5% 218 B3 1,158 94. 1.4 CMA CGM 8.875% 219 CCC1 579 16.1 2. FINMEC FINANCE SA 4.5% 221 BB1 38 15.58 1.4 AG SPRING FINANCE LTD 7.5% 218 B2 756 99.57 2. BRISA CONCESSAO RODOV SA 3.875% 221 BB1 235 16.42 1.4 EDP FINANCE BV 4.875% 22 BB1 211 113.38 2. HUNTSMAN INTERNATIONAL L 5.125% 221 B1 383 14.95 1.2 MONITCHEM HOLDCO 2 S.A. 6.875% 222 CCC1 69 12.29 2. SCHAEFFLER FINANCE BV 2.75% 219 BB3 261 1.25 1.2 EDP FINANCE BV 4.125% 22 BB1 21 19.65 2. INTERXION HOLDING NV 6% 22 B2 45 15.67 1.2 GIE PSA TRESORERIE 6% 233 B1 351 18.89 1.8 1 Week Underperformers 1 Month Underperformers Issue Rating STW Price Change Issue Rating STW Price Change NEW WORLD RESOURCES NV 7.875% 221 C 1,182 9. -4.8 EDCON HOLDINGS PTY LTD 13.375% 219 CCC2 2,44 78.38-11.5 EDCON HOLDINGS PTY LTD 13.375% 219 CCC2 2,44 78.38-4.6 NEW WORLD RESOURCES NV 7.875% 221 C 1,182 9. -6. MAGNOLIA BC SA 9% 22 B2 853 11.25-2.2 EDCON PTY LTD 9.5% 218 B3 1,158 94. -5.1 UNILABS SUBHOLDINGS AB 8.5% 218 B3 697 13.92-1.8 HECKLER & KOCH GMBH 9.5% 218 CCC2 1,93 95.52-4.9 HECKLER & KOCH GMBH 9.5% 218 CCC2 1,93 95.52-1.4 MANUTENCOOP FACILITY 8.5% 22 B2 74 13.4-3.9 HEMA BONDCO II BV 8.5% 219 B3 818 1.7-1.3 EDCON PTY LTD 9.5% 218 B3 1,14 94.5-3.9 NEW WORLD RESOURCES NV 7.875% 218 CCC3 2,149 69. -1. FRIGOGLASS FINANCE BV 8.25% 218 B1 752 11.75-3.4 WIND ACQUISITION FIN SA 7% 221 B3 511 17.5 -.6 PAGESJAUNES FINANCE & CO 8.875% 218 B2 885 1.5-2.8 LOXAM SAS 4.875% 221 BB3 466 1.13 -.5 NEW WORLD RESOURCES NV 7.875% 218 CCC3 2,149 69. -2.7 GATES GLOBAL LLC 5.75% 222 CCC1 562 97.2 -.5 UNILABS SUBHOLDINGS AB 8.5% 218 B3 697 13.92-2.6 SUNRISE COMMUNICATIONS H 8.5% 218 B3 437 15.5 -.5 HAPAG-LLOYD AG 7.75% 218 CCC1 629 14. -2.4 EDCON PTY LTD 9.5% 218 B3 1,14 94.5 -.5 STENA AB 5.875% 219 B1 387 17.5-2.2 Source: Merrill Lynch & Jyske Bank 4 of 11
29-8-214 Issuance - EUR bn. 6 Issuance EUR High Yield ex. fin. No. 16 No. Issues EUR High Yield ex. Fin. 5 4 14 12 1 3 8 2 1 6 4 2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21 211 212 213 214 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21 211 212 213 214 bn. Issuance EUR High Yield incl. fin. 9 8 7 6 5 4 3 2 1 Jan Feb Mar Apr Maj Jun Jul Aug Sep Okt Nov Dec 21 211 212 213 214 25% 2% 15% 1% 5% % EUR High Yield Rating distribution Issuance BB1 BB2 BB3 B1 B2 B3 CCC1 CCC2 21 211 212 213 214 Source: Merrill Lynch & Jyske Bank 5 of 11
29-8-214 European Issuance - EUR, USD & GBP bn. 1 9 8 7 6 5 4 3 2 1 EUR issuances excl. fin. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21 211 212 213 214 No. 2 18 16 14 12 1 8 6 4 2 No. of EUR issuances excl. fin. Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 21 211 212 213 214 bn. LTM Issuances in EUR, GBP & USD excl. fin 12 1 8 6 No. 8 7 6 5 4 No. of issuances on rating excl. fin. 4 3 2 Jan 211 Apr 211 Jul 211 Oct 211 Jan 212 Apr 212 Jul Oct Jan 212 212 213 USD GBP EUR Apr 213 Jul 213 Oct 213 Jan 214 Apr 214 2 1 BB1 BB2 BB3 B1 B2 B3 CCC1 CCC2 CCC3 CC 21 211 212 213 214 Source: Merrill Lynch & Jyske Bank 6 of 11
29-8-214 Spread vs. GDP US GDP Growth & High Yield Spread bp. % -1 2,1-8 1,6-6 -4 1,1-2 6 2 4 1 6 12-21 9-24 6-27 3-21 12-212 9-215 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 1,1 6 1 2 4 12-21 9-24 6-27 3-21 12-212 9-215 High Yield Spread (HEAD) Euro GDP YoY (rhs, inverted) bp. 2, 1,5 GDP Growth & High Yield (since 25) y = 653.51e -.92x R² =.364 bp. 2,5 2, High Yield vs. GDP Growth next Quarter (since 25) y = 632.72e -.18x R² =.5528 1, 1,5 1, 5 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
29-8-214 Rating Drift Source: Moodys & Jyske Bank 8 of 11
29-8-214 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 www.jyskebank.dk/terms. Jyske Bank's corporate bond recommendations - current breakdown Breakdown of recomendations, corporate bonds (number) 25 2 15 1 5 STRONG BUY BUY HOLD SELL 9 of 11
29-8-214 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
29-8-214 Contacts for Institutional Customers Ulrik Øllegaard Bøg Hansen Head of Corporate Bonds Sales, Vice President +45 89 89 76 78 Ulrik.Hansen@jyskebank.dk Nicolaj Brask Christiansen +45 89 89 76 77 NBC@jyskebank.dk Senior Sales Manager, Corporate Bonds Sales René Søndergaard Vinther Sales Manager, Corporate Bonds Sales +45 89 89 76 74 Rene.Vinther@jyskebank.dk 11 of 11