High Yield Highlights - uge 45 KION Hold Dong Energy - Køb Nykredit - Hold Abengoa Køb Ontex IV - Hold Fortsat positiv udvikling Vi fastholder vores Hold anbefaling efter regnskabsaflæggelse. Vi fastholder vores Hold anbefaling på Kion efter endnu et solidt kvartal med fremgang i både omsætning, indtjening og cash flow. Omsætningen steg 5,2 % i Q3 14. Som i første halvår, var fremgangen især drevet af Service forretningen, men i modsætning til første halvår, viste også nysalget fremgang i Q3. Klik her for at komme til analysen Knap så flot regnskab som i H1 Vor købsanbefaling på Dong fastholdes efter regnskab for 3. kvartal. Lidt svagere indtjening i Q3, men fortsat fremgang ÅtD. DONG s regnskab for Q3 viser en beskeden omsætningsvækst på,7 % i forhold til Q3 13, mens EBITDA falder med 6,9%. Hovedårsagen til den lavere indtjening er WindPower segmentet, hvor indtjeningen faldt 31 % i Q3. Klik her for at komme til analysen Swaps slører underliggende positiv trend Vi fastholder anbefalingen Hold på Nykredit Nykredits Q3 14 regnskab blev ramt af værdireguleringer af renteswaps, der skygger for en underliggende fremgang i basisindtægter, fald i omkostninger og nedskrivninger. Konkret vælger Nykredit at værdiregulere for DKK 1,6 mia. i Q3. Regnskabet giver dog ikke anledning til at ændre vores anbefaling. Klik her for at komme til analysen Abengoa udsteder nye obligationer Vi fastholder Køb på Abengoa. Abengoa Yields udstedelse af EUR 2 mio. senior notes erstattes af en udstedelse af USD 255 mio. senior notes oplyser Abengoa Yield. Nyheden bekræfter vores formodning om, at EUR udstedelsen, som blev annonceret 27/1, ikke blev opfattet som attraktiv af markedet. I forbindelse med nyheden om den ændrede udstedelse har Abengoa Yield offentliggjort foreløbige regnskabstal, som er in line with our expectations and budgets. Abengoa aflægger regnskab på onsdag 12/11 og Abengoa Yield fredag 14/11. Ontex IV offentliggør planer om refinansiering Vi holder fastholder vores Hold anbefaling på Ontex IV. Selskabet har offentliggjort, at de ønsker at refinansiere de eksisterende obligationsudstedelser. Dette skal ske via udstedelse af en ny EUR 25 mio. Senior Sikret obligationsudstedelse, Senior Banklån på EUR 38 mio. og en RCF på op til EUR 1 mio. Begge udstedelser indfries per 4. december 214. 9% 219 indfrielses vha. Make Whole klausulen til en indikativ kurs på 18,25 og 7,5% 218 indfries til kurs 13,75. Research 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
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) 49 bp. -9 bp. 1 bp. 13 bp. 4 bp. US High Yield non. Fin (HNF) 443 bp. bp. -5 bp. 12 bp. 32 bp. EUR High Yield (HE) 389 bp. -11 bp. -6 bp. 7 bp. 33 bp. US High Yield (HA) 43 bp. bp. -7 bp. 1 bp. 3 bp. itraxx Xover (Generic) 351 bp. -2 bp. 2 bp. 53 bp. 63 bp. CDX High Yield 341 bp. -3 bp. -4 bp. -13 bp. 28 bp. EUR Invest. Grade non. Fin. (EN) 89 bp. -2 bp. -2 bp. -7 bp. -17 bp. US Invest. Grade non. Fin. (CFX) 132 bp. 2 bp. 9 bp. 17 bp. 2 bp. EUR Invest. Grade (ER) 93 bp. -2 bp. -4 bp. -11 bp. -23 bp. US Invest. Grade (CA) 129 bp. 2 bp. 9 bp. 15 bp. 2 bp. itraxx Europe Invest. Grade 64 bp. -1 bp. -4 bp. -8 bp. -7 bp. CDX Invest. Grade 65 bp. 1 bp. -5 bp. -3 bp. 1 bp. itraxx Sr Financial 67 bp. bp. 1 bp. -12 bp. -18 bp. US 1Y 2.39% 5 bp. 5 bp. -3 bp. -6 bp. itraxx Sub Financial 156 bp. 1 bp. 3 bp. 47 bp. 28 bp. German 1Y.83%. -1 bp. -8 bp. -23 bp. -111 bp. bp 2,5 2, 1,5 1, 5 EUR HY vs. US HY Spread development 7-28 7-29 7-21 7-211 7-212 7-213 7-214 Difference (rhs) EUR HY (HEAD) US HY (HNF) bp 35 3 25 2 15 1 5-5 -1-15 bp 7 6 5 4 3 2 1 EUR IG vs. US IG Spread development 7-28 7-29 7-21 Difference (rhs) 7-211 7-212 EUR HG (EN) 7-213 7-214 US HG (CFX) bp 5-5 -1-15 -2-25 -3 Source: Bloomberg & Merrill Lynch & Jyske Bank 2 of 11
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 ONTEX IV 9% 219 B3 17.25 258-286 EDCON HOLDINGS PTY LTD 13.375% 219 CCC3 52.1 3,484-79 EDCON HOLDINGS PTY LTD 13.375% 219 CCC3 52.1 3,484-253 SB MINERALS FINANCE/SB I 9.25% 22 B2 114. 361-36 SB MINERALS FINANCE/SB I 9.25% 22 B2 114. 361-247 ONTEX IV 9% 219 B3 17.25 258-218 CIRSA FUNDING LUXEMBOURG 8.75% 218 B2 13.63 582-28 SUNRISE COMMUNICATIONS H 8.5% 218 B3 14.75 478-159 GEO DEBT FINANCE SCA 7.5% 218 B3 79.7 1,476-24 ONTEX IV 7.5% 218 BB3 13.9 281-144 SUNRISE COMMUNICATIONS H 8.5% 218 B3 14.75 478-148 NORSKE SKOGINDUSTRIER 7% 217 CCC3 56. 3,247-14 PERSTORP HOLDING AB 9% 217 B3 14.45 594-135 REXEL SA 7% 218 BB2 16.88 143-14 ONTEX IV 7.5% 218 BB3 13.9 281-16 PICARD BONDCO 9% 218 B2 14.75 538-99 PICARD BONDCO 9% 218 B2 14.75 538-96 LECTA SA 8.875% 219 B2 16. 695-95 AGROKOR D.D 9.875% 219 B2 19.51 58-84 GCS HOLDCO FINANCE I SA 6.5% 218 B2 14.13 56-93 EDCON PTY LTD 9.5% 218 B3 84.5 1,569-84 CEGEDIM SA 6.75% 22 B1 18.75 386-9 EDCON PTY LTD 9.5% 218 B3 84.5 1,569-84 DARTY FINANCEMENT SAS 5.875% 221 BB3 14.4 469-84 1 Week Underperformers 1 Month Underperformers Issue Rating Price STW Change Issue Rating Price STW Change INFOR US INC 1% 219 CCC1 18.5 689 642 GEO TRAVEL FINANCE 1.375% 219 CCC1 61.6 2,56 835 CAMPOFRIO FOOD SA 8.25% 216 BB3 12.3 51 324 TAKKO LUX 2 SCA 9.875% 219 B3 66.3 2,212 692 EN GERMANY HOLDINGS BV 1.75% 215 CCC1 97. 1,43 272 GAMENET SPA 7.25% 218 B1 83.75 1,282 613 TAKKO LUX 2 SCA 9.875% 219 B3 66.3 2,212 177 NORSKE SKOGINDUSTRIER 11.75% 216 CCC3 73.6 3,447 534 PAGESJAUNES FINANCE & CO 8.875% 218 B2 89.61 1,259 148 GEO DEBT FINANCE SCA 7.5% 218 B3 79.7 1,476 369 SMCP SAS 8.875% 22 B3 99.27 884 79 HECKLER & KOCH GMBH 9.5% 218 CCC3 74.5 1,993 365 ABENGOA SA 8.5% 216 B2 15. 479 75 SNAI SPA 12% 218 CCC2 11.61 1,14 315 HEMA BONDCO II BV 8.5% 219 B3 69.2 1,782 71 PAGESJAUNES FINANCE & CO 8.875% 218 B2 89.61 1,259 296 ABENGOA GREENFIELD SA 5.5% 219 B2 95. 66 66 CAMPOFRIO FOOD SA 8.25% 216 BB3 12.3 51 293 TITAN GLOBAL FINANCE PLC 8.75% 217 BB2 19.5 421 64 AG SPRING FINANCE II LTD 9.5% 219 CCC1 81.1 1,537 285 ABENGOA FINANCE SAU 8.875% 218 B2 17.22 641 62 CONVATEC HEALTHCARE 1.875% 218 B3 16. 58 271 MAGNOLIA BC SA 9% 22 B2 94.51 1,6 62 SISAL GROUP SPA 7.25% 217 B2 94.5 949 271 Source: Merrill Lynch & Jyske Bank 3 of 11
High Yield Bond Outperformers and Underperformers - Price 1 Week Outperformers 1 Month Outperformers Issue Rating STW Price Change Issue Rating STW Price Change GEO DEBT FINANCE SCA 7.5% 218 B3 1,476 79.7 4.8 EDCON HOLDINGS PTY LTD 13.375% 219 CCC3 3,484 52.1 9.3 SB MINERALS FINANCE/SB I 9.25% 22 B2 361 114. 4.4 SB MINERALS FINANCE/SB I 9.25% 22 B2 361 114. 5.3 EDCON HOLDINGS PTY LTD 13.375% 219 CCC3 3,484 52.1 3.2 DARTY FINANCEMENT SAS 5.875% 221 BB3 469 14.4 3.4 SNAI SPA 7.625% 218 B2 744 1.61 2.5 LECTA SA 8.875% 219 B2 695 16. 2.9 CIRSA FUNDING LUXEMBOURG 8.75% 218 B2 582 13.63 2.3 Nyrstar Netherlands Hold 8.5% 219 B3 863 99.5 2.8 PORTUGAL TELECOM INT FIN 4.5% 225 BB1 367 98.56 2.3 GCS HOLDCO FINANCE I SA 6.5% 218 B2 56 14.13 2.5 PORTUGAL TELECOM INT FIN 4.625% 22 BB1 371 13.3 2.1 NORSKE SKOGINDUSTRIER 7% 217 CCC3 3,247 56. 2.4 PORTUGAL TELECOM INT FIN 5% 219 BB1 345 16.25 2. GATEGROUP FINANCE LUX SA 6.75% 219 B1 512 15. 2.3 GATEGROUP FINANCE LUX SA 6.75% 219 B1 512 15. 2. LABEYRIE FINE FOODS SAS 5.625% 221 B2 522 11.38 2.2 EDCON PTY LTD 9.5% 218 B3 1,569 84.5 2. ALBA GROUP PLC & CO KG 8% 218 CCC1 1,474 82.2 2.2 EDCON PTY LTD 9.5% 218 B3 1,569 84.5 2. BOMBARDIER INC 6.125% 221 BB3 372 111.75 2.2 DOMETIC GROUP AB 9.5% 219 CCC2 1,96 94.5 1.9 NEXANS SA 4.25% 218 BB3 297 14.5 2.2 1 Week Underperformers 1 Month Underperformers Issue Rating STW Price Change Issue Rating STW Price Change PAGESJAUNES FINANCE & CO 8.875% 218 B2 1,259 89.61-3.7 GAMENET SPA 7.25% 218 B1 1,282 83.75-17.5 TAKKO LUX 2 SCA 9.875% 219 B3 2,212 66.3-3.7 GEO TRAVEL FINANCE 1.375% 219 CCC1 2,56 61.6-17.1 SMCP SAS 8.875% 22 B3 884 99.27-3.2 TAKKO LUX 2 SCA 9.875% 219 B3 2,212 66.3-15.7 INFOR US INC 1% 219 CCC1 689 18.5-3. MANUTENCOOP FACILITY 8.5% 22 B2 1,138 87.25-1.6 ABENGOA FINANCE SAU 6% 221 B2 666 95. -2.5 GEO DEBT FINANCE SCA 7.5% 218 B3 1,476 79.7-9.2 MAGNOLIA BC SA 9% 22 B2 1,6 94.51-2.4 SNAI SPA 12% 218 CCC2 1,14 11.61-8.1 EN GERMANY HOLDINGS BV 1.75% 215 CCC1 1,43 97. -2.4 AG SPRING FINANCE II LTD 9.5% 219 CCC1 1,537 81.1-7.9 HOLDIKKS SAS 6.75% 221 B1 956 84.71-1.9 PAGESJAUNES FINANCE & CO 8.875% 218 B2 1,259 89.61-7.8 ABENGOA FINANCE SAU 8.875% 218 B2 641 17.22-1.8 HECKLER & KOCH GMBH 9.5% 218 CCC3 1,993 74.5-7.2 HEMA BONDCO I BV 6.25% 219 B1 997 86.25-1.7 SISAL GROUP SPA 7.25% 217 B2 949 94.5-6.3 HEMA BONDCO II BV 8.5% 219 B3 1,782 69.2-1.6 ABENGOA FINANCE SAU 6% 221 B2 666 95. -6. TITAN GLOBAL FINANCE PLC 8.75% 217 BB2 421 19.5-1.5 FRIGOGLASS FINANCE BV 8.25% 218 B2 1,17 94.5-5.6 Source: Merrill Lynch & Jyske Bank 4 of 11
Issuance - EUR Source: Merrill Lynch & Jyske Bank 5 of 11
European Issuance - EUR, USD & GBP Source: Merrill Lynch & Jyske Bank 6 of 11
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 = 65.7e -.94x R² =.3256 bp. 2,5 2, High Yield vs. GDP Growth next Quarter (since 25) y = 633.4e -.18x R² =.5539 1, 1,5 1, 5 5 1 % 8 % 6 % 4 % 2 % % 2 % 4 % 6 % 8 % US GDP YoY Q3'14E GDP Growth Q2'14 GDP Growth 6 % 4 % 2 % % 2 % 4 % 6 % Euro GDP YoY Q3'14E GDP growth Q2'14 GDP Growth Source: Bloomberg, Merrill Lynch & Jyske Bank 7 of 11
Rating Drift Source: Moodys & Jyske Bank 8 of 11
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
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
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