08-11-2013
Weekly Highligts - Week 45
Europcar - Hold
Q3 showing advance
We maintain our HOLD recommendation based on the continuing narrowing of the spread in line with the improved profitability.
The results for Q3 '13 showed increasing sales and not least earnings. The sales decline in the first two quarters from Europcar seems to be stopped, while the earnings
advance continued.
Click here for the full report
Reynolds - Hold
The results did not prompt us to change our recommendation
Reynolds has turned in its Q3 '13 results, showing growth in both sales and adjusted EBITDA. The company's EUR-bonds are trading close to the call price and should
be seen as a short-term investment. Our recommendation is still HOLD.
Reynolds has turned in Q3 '13 results, showing sales growth of 2% (y/y) to USD 3,529m, while the reported EBITDA came to USD 602m, which was a decline of 8% (y/y). The
adjusted EBITDA (adjusted for integration costs, one-off costs, etc.) came to USD 684m, which was an increase of 2.4% (y/y).
Vimpelcom - Hold
Key figures from Vimpelcom
Vimpelcom reported results this morning, which alone include some key figures from Wind. They are in line with expectations/a tad above expectations. The results do
not change our current HOLD recommendation.
The trend in revenue is generally better than in the previous quarters, which have seen a decline in revenue of 8.5%. EBITDA was not as hard hit as feared. This coupled with
low capex results in a better-than-expected cash flow. There was no news on the refinancing of Wind's capital structure.
Click here for the full report
Vestas - Hold
Very strong guidance
We will most likely adjust our estimates of the free cash flow on the background of the realised figures and we restate our HOLD recommendation.
Guidance is surprisingly strong. Expectations are now for a free cash flow between EUR 500-700m. The EBIT margin before special items is expected to be above 2% (1%
before upgrade), which is mainly due to strong performance in the service division. Underlying earnings for the quarter exceeded expectations. Vestas’ EBIT margin before
special items was 4.6% (consensus: 4.1%). Given the realised earnings over the quarter, we are confident about Vestas’ ability to restore its margins going into 2014.
Click here for the full report
Reseach team:
Jens Houe Thomsen
Bo Andersen
+45 89 89 76 88
+45 89 89 76 87
[email protected]
[email protected]
Disclaimer & Disclosure:
Please see the last page
08-11-2013
08-11-2013
Spread Development
Change
Change
Spread/Rate
1 Week
1 Month
3 Month
Ytd
EUR High Yield non. Fin (HEAD)
420 bp.
-2 bp.
-24 bp.
-41 bp.
-62 bp.
EUR High Yield (HE00)
437 bp.
-6 bp.
-31 bp.
-53 bp.
iTraxx Xover (Generic)
340 bp.
-4 bp.
-57 bp.
-58 bp.
EUR Invest. Grade non. Fin. (EN00)
119 bp.
0 bp.
-5 bp.
-3 bp.
3 bp.
EUR Invest. Grade (ER00)
130 bp.
-1 bp.
-9 bp.
-9 bp.
-15 bp.
iTraxx Europe Invest. Grade
Spread/Rate
1 Week
1 Month
3 Month
Ytd
US High Yield non. Fin (H0NF)
443 bp.
2 bp.
-34 bp.
-45 bp.
-97 bp.
-117 bp.
US High Yield (H0A0)
434 bp.
3 bp.
-34 bp.
-46 bp.
-97 bp.
-142 bp.
CDX High Yield
106 bp.
0 bp.
2 bp.
1 bp.
6 bp.
US Invest. Grade non. Fin. (CF0X)
148 bp.
2 bp.
-4 bp.
-3 bp.
4 bp.
US Invest. Grade (C0A0)
146 bp.
2 bp.
-6 bp.
-7 bp.
-7 bp.
83 bp.
-1 bp.
-18 bp.
-13 bp.
-35 bp.
CDX Invest. Grade
74 bp.
0 bp.
-11 bp.
-1 bp.
-21 bp.
iTraxx Sr Financial
112 bp.
-5 bp.
-26 bp.
-24 bp.
-29 bp.
US 10Y
2.60%
-2 bp.
-3 bp.
1 bp.
84 bp.
iTraxx Sub Financial
167 bp.
-10 bp.
-36 bp.
-45 bp.
-68 bp.
German 10Y
1.68%.
-1 bp.
-13 bp.
0 bp.
37 bp.
EUR HY vs. US HY
Spread development
bp
2,500
bp
350
300
2,000
EUR IG vs. US IG
Spread development
bp
700
bp
50
600
0
200
500
-50
150
400
-100
300
-150
200
-200
100
-250
0
-300
250
1,500
100
1,000
50
0
500
-50
-100
0
07-2008
-150
07-2009
07-2010
Difference (rhs)
Source: Bloomberg & Merrill Lynch & Jyske Bank
07-2011
EUR HY (HEAD)
07-2012
07-2013
US HY (H0NF)
07-2008
07-2009
07-2010
Difference (rhs)
07-2011
EUR HG (EN00)
07-2012
07-2013
US HG (CF0X)
08-11-2013
High Yield Bond Outperformers and Underperformes - Spread to Worst
1 Week Outperformers
1 Month Outperformers
Ticker
Coupon
Maturity
Rating
Price
STW
Change
CETV
Ticker
Coupon
Maturity
Rating
Price
STW
Change
11.625
15-09-2016
CCC1
99.00
1,184
-261
CODERE
8.250
15-06-2015
CC
55.00
5,327
-761
NWORLD
7.875
15-01-2021
CCC3
42.80
2,456
-236
CODERE
8.250
15-06-2015
CC
54.00
5,481
-607
NWORLD
7.875
01-05-2018
B3
75.50
1,519
-190
HTC
9.500
15-12-2016
C
45.38
4,185
-348
REYNOL
8.000
15-12-2016
CCC2
100.25
441
-171
YIOULA
9.000
01-12-2015
CC
75.00
2,516
-325
ECOBAT
7.750
15-02-2017
B2
104.75
414
-147
ISSDC
8.875
15-05-2016
B3
102.10
467
-322
FROSTB
12.750
04-05-2019
CCC3
97.00
1,387
-113
ARGID
7.125
15-06-2017
CCC1
103.00
390
-288
PIAGIM
7.000
01-12-2016
BB3
104.49
419
-112
ONTEX
7.500
15-04-2018
B2
105.83
248
-230
HDDGR
9.250
15-04-2018
CCC1
105.75
703
-96
ICECR
8.375
15-11-2017
B2
106.81
119
-224
ARGID
7.125
15-06-2017
CCC1
103.00
390
-90
PERHOL
9.000
15-05-2017
B3
108.25
530
-192
KERLIN
10.625
01-02-2017
CCC1
106.63
441
-89
ECOBAT
7.750
15-02-2017
B2
104.75
414
-187
PERHOL
9.000
15-05-2017
B3
108.25
530
-80
SIEMNS
10.750
15-11-2015
CCC1
100.51
1,014
-179
9.000
01-11-2017
B2
104.00
726
-72
FDCSJ
8.750
01-03-2018
B2
110.00
405
-178
CETV
0
1 Week Underperformers
1 Month Underperformers
Ticker
Coupon
Maturity
Rating
Price
STW
Change
Ticker
Coupon
Maturity
Rating
Price
STW
Change
WINDIM
11.750
15-07-2017
B2
106.38
452
308
NSINO
7.000
26-06-2017
CCC3
53.50
2,718
445
ISSDC
8.875
15-05-2016
B3
102.10
467
289
NWORLD
7.875
15-01-2021
CCC3
42.80
2,456
390
SZUGR
5.250
30-06-2015
BB1
103.20
310
234
UNITY
8.125
01-12-2017
B1
104.33
421
379
AGROK
10.000
07-12-2016
B2
105.10
719
142
NSINO
11.750
15-06-2016
CCC3
68.00
3,020
379
CEMEX
9.625
14-12-2017
B1
105.20
518
118
CETV
11.625
15-09-2016
CCC1
99.00
1,184
325
NSINO
7.000
26-06-2017
CCC3
53.50
2,718
110
PIAGIM
7.000
01-12-2016
BB3
104.49
419
263
UNITY
8.125
01-12-2017
B1
104.33
421
107
SZUGR
5.250
30-06-2015
BB1
103.20
310
238
CODERE
8.250
15-06-2015
CC
54.00
5,481
99
IRM
MARKIV
8.875
15-12-2017
BB3
106.75
631
90
AGROK
ARGID
9.250
01-07-2016
B1
105.01
368
67
KINOVE
10.000
15-06-2018
B2
111.00
369
57
BORMIO
10.000
01-08-2018
B2
110.26
556
52
SKGID
Source: Merrill Lynch & Jyske Bank
6.750
15-10-2018
B2
101.15
539
229
10.000
07-12-2016
B2
105.10
719
197
NOVASP
9.625
15-12-2016
CC
48.00
4,416
180
WINDIM
11.750
15-07-2017
B2
106.38
452
172
7.250
15-11-2017
BB2
103.95
492
158
08-11-2013
High Yield Bond Outperformers and Underperformes - Price
1 Week Outperformers
1 Month Outperformers
Ticker
Coupon
Maturity
Rating
STW
Price
Change
Ticker
Coupon
Maturity
CETV
Rating
STW
Price
Change
11.625
15-09-2016
CCC1
1,184
99.00
5.9
CGMFP
6.750
01-04-2020
B1
562
101.90
6.6
NWORLD
7.875
01-05-2018
B3
1,519
75.50
5.0
CODERE
8.250
15-06-2015
CC
5,327
55.00
6.1
NWORLD
7.875
15-01-2021
CCC3
2,456
42.80
3.7
EDCON
9.500
01-03-2018
B3
912
100.50
5.5
HDDGR
9.250
15-04-2018
CCC1
703
105.75
3.0
EDCON
9.500
01-03-2018
B3
912
100.50
5.5
CETV
9.000
01-11-2017
B2
726
104.00
2.0
CODERE
8.250
15-06-2015
CC
5,481
54.00
5.1
PERHOL
9.000
15-05-2017
B3
530
108.25
1.9
YIOULA
9.000
01-12-2015
CC
2,516
75.00
4.8
HECKKO
9.500
15-05-2018
CCC2
903
99.84
1.8
TELEFO
7.625
18-09-2021
BB1
483
108.55
4.8
ENELIM
6.500
10-01-2019
BB1
429
106.68
1.7
ALTICE
9.000
15-06-2023
B3
624
108.75
4.7
ELEPOR
4.875
14-09-2020
BB1
291
105.13
1.7
PERHOL
9.000
15-05-2017
B3
530
108.25
4.6
TELEFO
6.500
18-09-2018
BB1
456
105.38
1.3
GAMENT
TELEFO
7.625
18-09-2021
BB1
483
108.55
1.3
ARGID
BRCORO
6.875
02-04-2018
BB1
391
109.50
1.2
PEUGOT
1 Week Underperformers
Ticker
7.250
01-08-2018
B1
618
102.27
4.5
11.125
01-06-2018
CCC1
895
110.13
4.4
6.000
19-09-2033
BB3
339
98.69
4.2
Coupon
Maturity
Rating
STW
Price
Change
7.875
15-01-2021
CCC3
2,456
42.80
-7.0
1 Month Underperformers
Coupon
Maturity
Rating
STW
Price
Change
BBDBCN
6.125
15-05-2021
BB2
354
108.62
-1.5
NWORLD
MOMENT
9.500
15-01-2021
CCC1
1,185
84.00
-1.5
NSINO
7.000
26-06-2017
CCC3
2,718
53.50
-6.3
NSINO
7.000
26-06-2017
CCC3
2,718
53.50
-1.4
CETV
11.625
15-09-2016
CCC1
1,184
99.00
-6.0
CMACG
8.875
15-04-2019
CCC1
875
97.50
-0.9
NSINO
11.750
15-06-2016
CCC3
3,020
68.00
-4.3
ONOSM
8.500
01-03-2020
B1
460
114.61
-0.9
CETV
9.000
01-11-2017
B2
726
104.00
-3.1
ARGID
5.000
15-11-2022
B1
368
98.40
-0.8
UNITY
8.125
01-12-2017
B1
421
104.33
-0.9
TCGLN
7.750
15-06-2020
B2
588
105.25
-0.8
KUGR
8.750
15-11-2017
B1
191
111.09
-0.6
JAH
7.500
15-01-2020
BB3
400
107.50
-0.6
AGROK
10.000
07-12-2016
B2
719
105.10
-0.6
BDC
5.500
15-04-2023
BB3
405
98.75
-0.5
SHAEFF
8.750
15-02-2019
BB3
315
113.13
-0.5
SISTP
7.250
30-09-2017
B2
532
103.50
-0.5
CONVAT
7.375
15-12-2017
B1
473
105.75
-0.5
LOXAM
7.375
24-01-2020
B2
529
106.25
-0.5
BBDBCN
7.250
15-11-2016
BB2
346
102.63
-0.4
EDCON
9.500
01-03-2018
B3
912
100.50
-0.5
LHAGR
6.500
07-07-2016
BB1
99
113.89
-0.3
Source: Merrill Lynch & Jyske Bank
Ticker
08-11-2013
Issuance - EUR
Issuance EUR High Yield ex. fin.
€ bn.
No. Issues EUR High Yield ex. Fin.
No.
140
50
45
120
40
100
35
30
80
25
20
60
15
40
10
20
5
0
Jan
Feb
Mar
Apr
May
2010
Jun
Jul
2011
Aug
Sep
2012
Oct
Nov
Dec
0
Jan
Mar
Apr
May
2010
Jun
2011
Jul
Aug
2012
Sep
Oct
Nov
Dec
2013
EUR High Yield Rating distribution Issuance
Issuance EUR High Yield incl. fin.
€ bn.
Feb
2013
60
25%
50
20%
40
15%
30
10%
20
5%
10
0
Jan
Feb
Source: Merrill Lynch & Jyske Bank
Mar
Apr
May
2010
Jun
2011
Jul
Aug
2012
Sep
Oct
2013
Nov
Dec
0%
BB1
BB2
BB3
2010
B1
2011
B2
2012
B3
2013
CCC1
CCC2
2010
2011
2012
2013
2010
2011
2012
2013
08-11-2013
European Issuance - EUR, USD & GBP
EUR issuances excl. fin.
€ bn.
No. of EUR issuances excl. fin.
No.
90
180
80
160
70
140
60
120
50
100
40
80
30
60
20
40
10
20
-
0
Jan
Feb
Mar
Apr
May
Jun
2010
2011
Jul
Aug
2012
Sep
Oct
2013
Nov
Dec
LTM Issuances in EUR, GBP & USD excl. fin
€ bn.
Jan
Feb
Mar
Apr
May
Jun
2010
2011
Jul
Aug
2012
Sep
Oct
2013
Nov
Dec
No. of issuances on rating excl. fin.
No.
70
120
60
100
50
80
40
60
30
40
20
20
0
01-2011
10
05-2011
09-2011
01-2012
05-2012
USD
Source: Merrill Lynch & Jyske Bank
GBP
09-2012
EUR
01-2013
05-2013
09-2013
0
BB1
BB2
BB3
B1
2010
B2
2011
B3
2012
CCC1
2013
CCC2
CC
D
USD
GBP
EUR
2010
2011
2012
2013
08-11-2013
Spread vs. GDP
US GDP Growth & High Yield Spread
bp.
EUR High Yield Spread vs. GDP Growth
%
-10
2,100
-8
-6
1,600
-4
-2
1,100
%
bp.
-6
2,100
-4
1,600
-2
1,100
0
0
2
600
600
2
4
100
12-2001
09-2004
High Yield Spread (H0A0)
06-2007
03-2010
US GDP YoY (rhs, inverted)
6
12-2012
09-2015
Bloomberg consensus
GDP Growth & High Yield (since 2005)
bp.
2,000
100
12-2001
1,500
03-2010
12-2012
Euro GDP YoY (rhs, inverted)
4
09-2015
High Yield vs. GDP Growth next Quarter (since 2005)
bp.
y = 695.64e-0.1x
R² = 0.3503
09-2004
06-2007
High Yield Spread (HEAD)
2,500
y = 609.88e-0.181x
R² = 0.7601
2,000
1,500
1,000
1,000
500
500
0
0
10 %
8%
6%
Source: Bloomberg, Merrill Lynch & Jyske Bank
4%
2%
0%
2%
4%
US GDP YoY
Q4'13E GDP Growth
Q2'13 GDP Growth
6%
8%
6%
4%
2%
0%
2%
Euro GDP YoY
Q4'13E GDP growth
Q2'13 GDP Growth
4%
6%
08-11-2013
Rating Drift
High Yield Rating Drift US & EUR
EUR High Yield and High Grade Rating Drift
60%
40%
40%
20%
20%
0%
0%
-20%
-20%
-40%
-40%
-60%
-60%
-80%
-80%
-100%
05-1990
08-1993
12-1996
03-2000
06-2003
Europe
10-2006
01-2010
-100%
03-2004
05-2013
07-2005
11-2006
US
04-2008
08-2009
High Grade
EUR High Yield Rating Drift vs. Default Rate
01-2011
05-2012
10-2013
High Yield
High Yield Rating Drift vs. PMI
40%
0%
-10%
5%
60
15%
56
-5%
52
-60%
10%
-110%
15%
-25%
48
-45%
44
-65%
40
-160%
03-2000
12-2002
09-2005
Moody's High Yield Rating Drift (lhs)
Source: Moodys & Jyske Bank
06-2008
02-2011
European Default Rate
20%
11-2013
36
05-2005
-85%
06-2006
07-2007
08-2008
PMI Output Index (lhs)
09-2009
10-2010
11-2011
12-2012
EUR HY RATING DRIFT 5M Lag (rhs)
08-11-2013
Disclaimer
& Disclosure
Jyske
Bank’s corporate
bond recommendations – current breakdown
Breakdown of recommendations, Corporate Bonds (number)
20
18
16
14
12
10
8
6
4
2
0
STRONG BUY
BUY
HOLD
SELL
08-11-2013
08-11-2013
Contacts for Institutional Customers
Morten Storgaard Andersen
Vice President, Head of Corporate Bonds Sales
+45 89 89 76 78
[email protected]
Nicolaj Brask Christiansen
Senior Sales Manager, Corporate Bonds Sales
+45 89 89 76 77
[email protected]
René Søndergaard Vinther
Sales Manager, Corporate Bonds Sales
+45 89 89 76 74
[email protected]