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Lebara case undermines Nordic market as issuance in the region drops 26% YoY



By Ioannis Gougoulias

The data below were retrieved using CMDportal's Data Sheet and Instrument Search tool.



Issuance in Nordic countries drops 26% YoY

Within the CMDportal universe, the Nordic Market comprises of the following countries: Sweden, Norway, Denmark, Iceland and Finland. The issuance coming from Nordic issuers has reached EUR65.4bn up to the second week of April 2018. This figure is down by 26% compared to the same period last year, when it reached EUR88.6bn. Danish and Swedish FIGs reduced significantly their issuance EUR29bn to EUR9bn. In total, Nordic FIGs dropped their issuance by EUR22.3bn to EUR16.7. Another sector that shrunk massively is the Corporate one. Electricity and Telecommunications industries printed fewer deals, while the Real Estate one seems still affected by the drop in house prices in 2017.


Is the Lebara case enough to undermine the Nordic High Yield market
?

The recent case of Lebara, the Netherlands based Telecommunications company, who failed to report the financial statements of three of its non-mobile subsidiaries has put some pressure on the Nordic Markets. The failure to report its financial statements caused problems and breached the covenants of the bond. As a result, the price of the bond dropped more than 30%. The company tapped the Nordic market in August 2017 by issuing a EUR350m Bond. This case raises questions on the nature of the Nordic Bond market, which does not require credit rating or due diligence for the issuers. Companies, tapping the market, are required to submit a simple documentation template, with limited disclosure of risk factors and as a result can claim more or less what they like when selling new debt. Is the light regulation of the Nordic Bond market and the Lebara case able to hammer this specific market?
 


Aker BP signals the return of Oil & Gas companies

The increase in the oil price close to USD70 per barrel is a starting point for the return of Oil & Gas Corporates in the High Yield Nordic market. Aker BP, the Norwegian oil exploration company, and its parent company Aker ASA have returned this year to the Nordic High Yield market with deals that were substantially oversubscribed.


NOK and SEK issuance drops 33% and 49% YoY

In terms of currencies, most of the deals in 2018 YTD are denominated in EUR, which represent more than 50% of the total issuance. A large chunk is denominated in the USD currency, EUR12bn (35% down YoY). The issuance in the NOK and SEK currencies is down YoY by 33% and 49%, respectively. We expect these number to grow in the next months as FIGs and Corporates will try to avoid foreign currencies issuance because of the rise of cost of swaps.


Where is this data coming from?

CMDportal is the global bond and money market utility connecting issuers, dealers and investors. The service aggregates data from a wide range of sources, including issuers, dealers and fund investors recording both who issued, who traded and who bought the instruments.

Can i produce a Debt Capital Markets statistical query like this?

Yes you can. CMDportal provides a wide range of tools to analyse bond and money markets. Data Sheet results can be downloaded as an XLS file.


Mr. Gougoulias is an Analyst at CMDportal. He can be reached at analysts@cmdportal.com.
 



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