Credit Research - Jernhusen...portfolio value of about 25% 2005-2011, following the 2012 disposal of Kungsbrohuset in Stockholm, but is now on the rise given investments in the Stockholm

IMPORTANT INFORMATION AND DISCLOSURES AT THE END OF THIS REPORT

24 November 2012

Credit Research

Andreas Zsiga +46 8 514 6203 [email protected]

www.nordeamarkets.com

Jernhusen

Chugging on in the right direction Q3 2013

Like-for-like revenues and NOI improving. Jernhusen reported a

3% decline in 9M revenues YoY (2% Q3 YoY), while the NOI-

margin weakened to 41% (45%), reflecting previous portfolio dis-

posals (Kungsbron in Stockholm) as well as the hotel closure at the

Central Station Stockholm City. On a comparable basis, sales in-

creased 8%, and NOI improved to 39% (37%).

Continued strong underlying demand. Jernhusen refers to in-

creased sales in the Swedish retail sector, with its core customer seg-

ment fast food growng 4% YoY and translating into higher sales

among rental customers. Additionally, underlying demand is sup-

ported by further gains in rail passanger and freight volumes.

Project investments increases LTV. Continued investments boost-

ed property values by some 5% to SEK10.6 bn, while the LTV level

increased slightly to 56% (53% by YE12). Major development pro-

jects involving the Stockholm City Station and the Malmö Central

Station has been initiated, while the new Depot in Boxholn has been

completed, with the Stockholm Årsta Kombiterminal close to com-

pletion..

Refinancing now completed. The company has printed four SEK

bonds totaling SEK1.8bn, while signing two secured credit facilities

totaling SEK1.65 bn (SEK1 bn maturing 2015, SEK650m 2016),

replacing the 2013 RCF maturitiy.

Key credit drivers — stable with a positive twist

Performance trend looks robust. We take comfort from the strong

like-for-like improvement in revenues and NOI. The ongoing project

development is a risk incorporate into the credit profile., and has

solid long term potential.

Refinancing and lower LTV improves financial risk profile. The

refinancing extends debt maturities, hence addressing one of our

previous concerns regarding Jernhusens financial profile. The con-

tained LTV levels, and reduced secured debt to some 10% of LTV

is positive for senior unsecured lenders.

We see no changes to strategy or ownership risks.

We are firm on our A corporate rating (BBB standalone).

Recommdendation We remain market perform on Jernhusen’s SEK bonds, but note

that Rikshem (-/A-) and Fortum offers interesting comparable

at slightly wider spreads at the 4.5 year point. We think that

Vasakronan’s new issue curve should carry a premium compared to

airport operator Swedavia and real-estate company Jernhusen, re-

flecting the direct state ownership in the two latter entities by the

Ministry of Finance.

Corporate family ratings

Long Outlook

S&P n.r n.r

Moody’s n.r n.r

Nordea Markets A Stable

Rental revenues and PMP (SEKm)

Unsecured bond ratings

Long Outlook

S&P n.r n.r

Moody’s n.r n.r

Nordea Markets A Stable

Debt and debt/EBITDA (SEKm, x)

Recommendation

Market perform

0

0,2

0,4

0,6

0,8

1

1,2

1,4

1,6

1,8

2

48%

50%

52%

54%

56%

58%

60%

62%

64%

66%

2008 2009 2010 2011 2012 2013

Q3LTM

2013E2014E2015E

Loan-to-value Debt/equity

Source: Company reports

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2008 2009 2010 2011 2012 2013

Q3LTM

2013E 2014E 2015E

Total income NOI PMP NOI-margin


Jernhusen 24 October 2013

www.nordeamarkets.com 2

Relative value comparison

-5,0

15,0

35,0

55,0

75,0

95,0

115,0

-1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0

Vasakronan Akademiska Hus Specialfastigheter Swedavia Jernhusen

SHYP Hemsö Rikshem Fortum



Shadow rating approach and rationale

Applied rating methodology

Based on S&P

methodology

In line with S&P, we base our shadow rating on Jernhusen on the company’s stand-alone

credit profile, adding ratings uplift for potential extraordinary ownership support, reflect-

ing the likelihood for timely, extraordinary support by its key shareholder in a situation of

financial distress.

BBB stand-alone Stand alone rating profile BBB

Our shadow rating is based on a “Strong” business risk profile, and a “Significant” finan-

cial risk profile.

Supported by

attractive portfolio

Credit supportive Centrally and strategically located properties throughout the Swedish national railroad

network

Portfolio value concentrated to the three largest regions in Sweden

Dversified earnings base, with a meaningful share of revenue from state-owned or public entities

Good prospective growth in passenger volumes to support

Potential for divestments of non-core properties to balance planned investments

Solid financial risk management framework, including adequate liquidity profile fol-lowing the H113 refinancing.

Capped by

commercial property

and financial profile

Credit challenges Relatively moderate debt leverage with loan-to-value at 56% at Q3 2013 (YE 2012

53%)

Exposure to commercial tennats within the retail and office segment, with some tenant concentration risk

Smaller size compared to larger rated peers

Growing project development activities, which carries higher risk than ordinary prop-erty management

Uplift to A given ownership support

Full state ownership

and transport policy

role

In our view, Jernhusen would benefit from a “High” likelihood of extraordinary support, providing a 2 notch uplift to A given the following factors:

100% owned by the Kingdom of Sweden, with no political agenda to be privatized. According to the shareholder, Jernhusen has “an important strategic function without any specific public policy role”.

In our understanding, the shareholder views Jernhusen as a vehicle for promoting com-muting and regional passenger traffic (through development of train stations and maintenance depots) and therefore plays a role in executing the national/regional transport policy

Jernhusen’s significant development projects are supported by the shareholder as they will further promote commuting/regional & national passenger traffic, thereby ena-bling further growth of the largest Swedish city regions.

Even though these development projects could theoretically be assumed by a private entity/investor, our impression is that the government would like to remain “in control” of and ripe the benefits of these major projects.



Group Profile

100% state owned Jernhusen was incorporated in 2001 as part of a wider restructuring of the Swedish nation-

al railway sector, separating train operations, infrastructure management, and property

management. The company is 100% owned by the Kingdom of Sweden, and the owner-

ship is managed by the Ministry of Finance. The portfolio value was SEK10.6 bn at Q313.

Focus on rail related

properties

The company owns, manages and develops railway related properties throughout the main

lines in the Swedish railway network, including a number of train stations, maintenance

depots and cargo terminals. Jernhusen owns land in attractive locations, mainly close to

train stations, which the company develop over time.

Commerically

operated & financed

Jernhusen’s key objective is to contribute to an increased use of public and sustainable

transport. The company is operated and financed on commercial terms, and is organized in

four business areas:

Business dominated

by Stations

Significant project

development

Stations. A key area constituting 52% of portfolio value, 50% of rental revenues and 44%

of NOI (2012). It is dominated by retail outlets and resturants, and some offices, in 60

locations. Rental contracts normally include a fixed and a turnover based element.

City projects. Manages and develops projects close to stations, mainly in major cities.

Projects are typically divested at completion. It significantly reduced from an average

portfolio value of about 25% 2005-2011, following the 2012 disposal of Kungsbrohuset in

Stockholm, but is now on the rise given investments in the Stockholm City Station area.

Depots. 20 depots across Sweden with a YE12 market value of SEK2.8bn. Customers are

train operators and regional public transport authorities. Demand is growing on the back

of increased traffic volumes.

Cargo terminals. 13 cargo terminals with customers in the intermodal freight business. It

is relatively marginal to the overall business, and has lost traffic volumes to direct truck

operations for several years.

Figure 1: Business area composition 2012 (%) Figure 2: Revenue per property type 2012 (%)

Figure 3: Segment revenue and NOI-margin Figure 4: : Geographical revenue composition 2012

0%

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100%

0%

20%

40%

60%

80%

100%

Property value Rental revenues NOI

Stations City projects Depots Cargo terminalSource:Source:

0 10 20 30

Resturants and retail

Maintenance

Transport related offices

Construction

Office

Storage

Other

Source: Company report

0 20 40 60

Stockholm

Gothenburg

Malmö

Helsingborg

Örebro

Uppsala

Västerås

Other

Source: Company report

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2008 2009 2010 2011 2012 LTM Q2

2013

Stations City projects Depots

Cargo terminals EBIT-marginSource: Company report



Business Operations

Credit supportive

portfolio structure

Low vacanies

Less cyclicality than

commercial properties

in general

We consider the overall composition of Jernhusens property portfolio as credit supportive.

In the Station, Depot and Cargo terminal segments, the specialty nature of the properties

means that entry barriers are very high, and that tennats have a high strategic interest in

maintaining long-term relationships (balancing short lease maturities of about one year in

Depots). In addition, the long-term trend is for increased traffic flow on the main lines of

the Swedish railway sector, especially in terms of passanger volumes, is underpinning

demand in the Station and Depot business. This is also illustrated by low vacancy levels

of about 5%.

We think that Jernhusens rental revenues are less cyclical than in the commercial property

sector in general. Rents in the Station business is partially linked to turnover, but given the

nature (low-cost fast food, newspapers, etc.), the demand is fairly stable, underpinned by

steadily growing passanger volumes. This balance the relatively short lease contracts.

Concentration to

major cities

The geographical location of Jernhusen’s portfolio is positive from a credit perspective.

As of year-end 2012 the vast part, or 84%, of Jernhusen’s portfolio value is concentrated

to the three largest regions in Sweden: Stockholm (48%), Gothenburg (18%) and Malmö

(8%). The properties are generally strategically located in city centres. Over the past years,

Jernhusen has divested a number of station buildings located in smaller cities to concen-

trate development in the major, growing urban areas.

Managable tennat

concentration risk

Jernhusen is exposed to some tennat concentration risk. The five largest tennats provide

about 45% of rental value (of which the state-owned railway operator SJ AB proving

20%). Meanwhile, the operations of the largest tennants are intristically linked to the

railway infrastructure, with basically no or few alternatives.

The project business

carries higher risks

The City project business overall increases Jernhusen’s business risk. A few projects are

of significant scale and long term horizon (e.g. the Stockholm and Gothenburg Central

stations). The main risks are related to project execution and letting at completion. Balanc-

ing this, Jernhusen requires certain level of pre-letting (depending on the project size), and

all major investment projects are subject to a board decision. Furthermore, the attractive

locations of the properties reduces letting risk considerably, in our view.

Figure 5: Tennant structure 2012 (%) Figure 6: Yield vs. 5-yr swap rate (%)

Figure 7: Lease expiery (% of total) Figure 8: Vacancy rates (%)

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35

40

2014 2015 2016 2017 2018 2019 2020-

Share of rental revenuesSource: Company report

6%

20%

5%

9%

4%

56%

Reitan Servicehandel

SJ

Scandic Hotels

Euromaint Rail

ISS Facility Services

Övriga

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8

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2008 2009 2010 2011 2012 LTM Q3

2013

Yield SEK 5 year swap rateSource: Company reports , Bloomberg

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12

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16

18

20

0

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20

25

2008 2009 2010 2011 2012 LTM Q3

2013

Area based vacancy rate Economic vacancy rateSource: Company reports



Financial Profile

Figure 1: LTV (%) Figure 2: Rental income and earnings (SEKmn, %)

Figure 1: Capitalization ratios (%, x) Figure 2: EBITDA ICR (x)

Solid capital structure and financial performance

Moderate gearing

ratios

Jernhusen’s capital structure and leverage has fluctudated a bit over the years, reflecting

the impact from project development and portfolio adjustments. Meanwhile, the credit

measures are fair for a BBB credit. This includes an equity ratio of 35-43%, and a net

debt/equity averaging 135% over the last five years (40% and 120% by Q32013).

LTV fair for a BBB

credit

The LTV ratio has varied in the range of 53-60% in the 2008-2012 period (56% Q32013),

This is fair for a mid-BBB credit considering the stability of the business. LTV levels

could increase above 60% in the 2014-2016 given high investments. We are not concerned

given the stability of the business and attractiveness of properties development, and the

capacity to reduce LTV once projetcs are completed.

Moderate but stable

NOI-margins

Weak cash flow

measures is a sector

characteristic

Interest management

compares favorably

The NOI-margin has fluctuated between 43-50% since 2008. The trend has been declin-

ing, reducing to 41% LTM Q3 2013. The level is comparatively moderate in a peer group

perspective including commercial real estate companies, and reflect the more stable busi-

ness as well as considerable development features in the portfolio. Yield levels in Jern-

husens portfolio is average in our view at about 5-6% considering the strength of the port-

folio. Meanwhile, the company has struggled to meet its return on equity target of 12%,

reflecting significant developing activities in the magnitude of 10-15% of total portfolio

values and the high equity capitalization.

FFO/Net debt has fluctuated between 5% and 7% (5.4% 2012). This is weak compared to

most other sectors, but reflective of the real estate sector funding and cash generation pro-

file and hence constitute no major concern in our view.

The declining EBITDA ICR trend 2009-2012 has reversed, reaching a reported 3.1x at

Q22013 (3.2x 2012). This compares well to sector peers. The improvement reflects fairly

stable EBITDA levels combined with significantly reduced interest expenses given the

declining interest rate environment. Jernhusen has a well extended average interest rate

maturity of 4 years at Q3 2013, which will provide protection in a potentially raising inter-

est rate environment.

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2008 2009 2010 2011 2012 2013 Q3

LTMSource: Company report

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180%

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120%

140%

160%

180%

2008 2009 2010 2011 2012 2013 Q3

LTM

Source: Company reportsSource:

48%

50%

52%

54%

56%

58%

60%

62%

48%

50%

52%

54%

56%

58%

60%

62%

2008 2009 2010 2011 2012 2013 Q3

LTMSource: Company reports , Nordea

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0

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1 000

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2008 2009 2010 2011 2012 2013 Q3

LTM

Total income NOI PMP




Funding and Liquidity on an improving trend

H1 2012 refinanicng

credit positive

A well diversified

funding structure

Jernhusen has traditionally relied on secured bank financing. During 2012, the company

has shifted towards market based funding, reducing the level of bank debt substantially

and lowering the utilization of bank facilities. Overall, we view the refinancing, including

debt maturity extension and lower secured LTV, as credit supportive

During H113, the company agreed several credit facilities totaling SEK4.65bn, replacing

the SEK6.7bn facility maturing H22013. Out of the new facilities, SEK3 bn is unsecured

(average maturity about 2 years), and aimed for back-up of the SEK3 bn CP program,

which was fully utilized at Q22013. A SEK1.65bn facility remain secured.

As part of the refinancing, the company has issued a total of SEK1.6 bn of bonds under its

SEK3 bn MTB-program. The refinancing has reduced the share of secured debt to a LTV

equivalent of 16% by Q22013, well in line with the company’s financial targets.

Change of control

protection

Jernhusen’s bonds contain change of control clauses should the Kingdom of Sweden re-

duce its ownership below 100% of shares and votes.

Adequate liquidity

bordering strong

Liquidity is adequate bordering strong, and one of our major, previous credit concerns

have now been addressed. The maturity profile has been extended by Q22013 to 2.8 years.

Short term debt maturities largely consist of CPs. Liquid assets consist of some SEK25-

100 mn in cash (seasonally fluctuating) and unutilized committed credit lines of

SEK4.65bn at Q2 2013).

. Financial policy provides adequate risk management

Financial policy is

balanced

Jernhusen has recently updated its financial policy. We generally consider the require-

ments as adequate and credit protective, even if the interest maturities policy allows for an

opportunistic application. Meanwhile, we understand that the company has historically

maintained considerable headroom to its policy levels, which is positive.

Figure 9: Debt and interest maturity profile Q313 (yrs) Figure 10: Loan portfolio Q313 (SEK bn)

Area Policy requirement Comment

Average debt maturity Minimun 2 years Positive, limits refinancing risk

Unutilized credit facility and liquidity/ST debt Minimum 100% Adequate

Secured funding LTV Maximum 200% Positive for bond holders

Average interest rate maturity 1-5 years Fairly generous/opportunistics

Interest maturities within 12 months Max 60% Fairly generous/opportunistic

ICR Minium 2x Adequate, sector standard

Equity ratio 35-45% Adequate, provide good tolerance

guidance

0 2000 4000 6000 8000

0 1000 2000 3000 4000 5000 6000 7000

Secured bank facilities

Unsecured bank facilities

Bonds (MTN)

CP

Overdraft facility

Other loans

Utilized FrameSource: Company reports

0

500

1000

1500

2000

2500

0

500

1000

1500

2000

2500

3000

3500

0-1 1-2 2-3 3-4 4-5 > 5

Interest DebtSource: Company report



LTV and ICR Rental revenues and profitability

Key Financials

Key Financial Ratios and forecast

2013-2015 reflect a

peak in investments

Our 2013-2015 forecast incorporates a significant net investment level (SEK3.7 bn), with

a gradual increase in rental revenues and earnings (about 10% a year). Interest rates are

expected to trend up slightly towards 3% on average. We see significant room to trim

down gearing ratios, including LTVs once projects have been completed, as well as tem-

per investment activity to weakening market conditions.

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2008 2009 2010 2011 2012 2013

Q3LTM

2013E 2014E 2015E

Total income NOI PMP NOI-margin


0,0x

1,0x

2,0x

3,0x

4,0x

5,0x

6,0x

7,0x

8,0x

48%

50%

52%

54%

56%

58%

60%

62%

64%

2008 2009 2010 2011 2012 2013

Q3LTM

2013E 2014E 2015E

Loan-to-value EBITDA interest coverage


Income statement (SEKm) 2008 2009 2010 2011 2012 2013 Q3 LTM 2013E 2014E 2015E

Total income 868 1 014 1 094 1 161 1 140 1 140 1 277 1 430 1 601

Net operating income 405 453 498 549 508 471 541 606 678

Depreciation 0 0 0 0 0 0 0 0 0

Capital gains 0 0 0 0 0 0 0 0 0

Central administration (37) (40) (46) (42) (41) (36) (40) (40) (40)

Items distorting comp. 0 0 0 0 0 0 0 0 0

Operating income 166 103 739 392 523 407 631 696 769

Property management profit (PMP) 368 414 452 507 468 435 338 371 397

Net financial expenses (124) (55) (99) (163) (182) (140) (163) (195) (241)

Pre-tax profit 42 48 641 229 341 267 468 501 528

Tax (paid) 11 (4) (151) (54) 222 3 100 100 100

Deferred tax 0 0 0 0 0 0 0 0 0

Net profit 53 43 490 175 564 270 568 601 628

Balance sheet (SEKm)

Properties 7 186 8 946 9 502 10 829 9 896 10 622 12 359 13 889 14 919

Other assets 651 768 900 744 744 680 744 744 744

Cash and bank 31 11 6 10 8 186 8 8 8

Total assets 7 868 9 726 10 407 11 583 10 648 11 488 13 111 14 641 15 671

Equity 3 121 3 618 4 011 4 088 4 555 4 669 4 556 5 056 5 197

Interest-bearing liabilities 4 042 5 279 5 347 6 484 5 268 5 931 7 093 8 491 9 380

Non-interest liabilities 401 520 591 498 526 529 1 162 794 794

Total liabilities and equity 7 868 9 726 10 407 11 583 10 648 11 488 13 111 14 641 15 671

Debt 4 042 5 279 5 347 6 484 5 268 5 931 7 093 8 491 9 380

Cash flow statement (SEKm)

FFO 204 345 357 349 282 267 338 371 398

Cash flow from operations 276 480 347 343 343 301 338 371 398

Investments (properties) (609) (2 129) (1 401) (1 161) (1 060) (1 188) (1 500) (1 500) (1 500)

Disposals (properties) 48 73 1 086 5 2 114 149 100 100 600

Dividends (100) (100) (100) (100) (100) (100) (100) (100) (100)

DPS 25 25 25 25 25 25 33 33 34

No of shares (m) 4 4 4 4 4 4 40 40 40

Discretionary cash flow (385) (1 676) (68) (913) 1 297 (838) (1 162) (1 129) (602)

Key ratios

Loan-to-value 56% 59% 56% 60% 53% 56% 57% 61% 63%

Equity ratio 40% 37% 39% 35% 43% 41% 35% 35% 33%

Debt/equity 130% 146% 133% 159% 116% 127% 156% 168% 180%

Debt/debt+equity 56% 59% 57% 61% 54% 56% 61% 63% 64%

EBITDA interest coverage 4,0x 7,1x 4,5x 3,0x 2,5x 2,9x 3,1x 2,9x 2,6x

EBITDA/(net interest plus dividends) 2,2x 2,5x 2,2x 1,9x 1,6x 1,7x 1,9x 1,9x 1,9x

FFO/debt 5,1% 6,5% 6,7% 5,4% 5,3% 4,5% 4,8% 4,4% 4,2%

FFO less dividends/debt 2,6% 4,6% 4,8% 3,8% 3,4% 2,8% 3,4% 3,2% 3,2%

Net rental income/interest 4,4x 10,6x 7,2x 4,7x 4,5x 5,0x 7,8x 7,3x 6,6x

Debt/EBITDA 8,2x 13,4x 12,1x 13,1x 11,5x 14,4x 14,2x 15,0x 14,7x

NOI-margin 46,6% 44,7% 45,5% 47,3% 44,6% 41,3% 42,4% 42,4% 42,4%

Property yield (actual) 11,3% 5,6% 5,4% 5,4% 5,2% 4,4% 4,9% 4,6% 4,7%



Peer Group Comparison

Government related property companies provide good peers

Jernhusen’s mix of commercial and transportation infrastructure policy related properties

with governent ownership implies that the most relevant peer group is found among other

government owned or related property companies.

Rikshem

Rikshem is a somewhat larger company focusing on residential, student and elderly

housing in Sweden, which carries lower business risk. Meanwhile, the financial profile is

weaker given a higher LTV (above 60%) and more aggressive funding (short debt and

interest maturities. The ownership support is weaker (50/50 by State Pension Fund 4

(AP4) and the AMF pension fund), but it has no government policy role.

Vasakronan

Vasakronan is a significantly larger company, focusing on CBD office and retail property

in the three major urban areas in Sweden. We see business risk as slightly higher than

Jernhusen. The financial profile is at par, with LTV and debt and interest maturities

roughly equal. We notch up the shadow rating on Vasakronan given the 100% ownership

by State Pension Funds 1-4, but consider that there is less room for an uplift given lack of

direct government ownership and absence of any government policy role.

Akademiska Hus

Fully government owned, Akademiska Hus provides facilities for Swedish universities

and colleges under long term contracts. The business risk is significantly lower than

Jernhusen, and financial risk is also lower given LTV levels. S&P’s standalone rating on

Akademiska Hus is aa-, with a one notch uplift.

Specialfastigheter

Fully government owned, Specialfastigheter provides offices and special property

facilities to the Swedish law enforcement sector (police and prisons), as well as some

military related facilities. This renders a significantly lower business risk, while financial

risk is comparable (e.g. similar LTV levels).

Hemsö Jernhusen Rikshem Vasakronan Akademiska Hus Special-fastigheter

Rating (S&P) -- -- A- -- AA AA+

Nordea shadow rating BBB+ A A- BBB+

Nordea (stand alone) BBB+ BBB A- BBB

Ownership 85% AP3,15% Sagax 100% Gov 50% AP,50% AMF 25% each AP1-4 100% Gov 100% Gov

CoC MTN <50% AP1-4 ownership 100% Gov 97% combined, 50/50

(no MTN, different in the

2 PPs)

51% AP1-4 50% Gov 100% Gov

Program MTN SEK6bn MTN SEK6bn MTN SEK25bn MTN SEK8bn MTN SEK10bn

(SEKm) (SEKm) (SEKm) (SEKm) (SEKm) (SEKm)

Gross rental income 1998 1161 1277 5 969 5 625 1 767

Net operating income 1369 508 672 4 272 3 585 1 354

Net income 635 564 -21 3 923 3 147 1 381

Funds from op. 415 282 116 2 432 2 588 934

Net investments 363 -1047 3054 435 2 388 1 094

Dividends 116 100 1 273 1 245 17

BV Properties 21518 9896 17100 84 074 54 677 19 169

Debt incl- shareholder loans 16686 5268 14091 43 217 24 301 9 584

Op. performance

Weighted avg lease mat (years) 7,5 2,9 13,2 4,3 5,1

Weighted avg debt mat (years) 3 2,8 1,2 2,7 6,5 3,3

Weighted avg interest mat (years) 2,8 4,8 3,6 4,5 3,4 2,4

Weighted avg cost of debt service 3,2% 3,2% 3,3% 2,8% 3,0%

Key ratios

Yield 6,4% 5,9% 3,9% 5,7% 7,1% 7,2%

NOI-margin 69% 44% 53% 72% 64% 77%

EBITDA interest cov 2,3x 3,2x 1,9x 2,7x 6,7x 6,3x

FFO/debt 2,5% 5,4% 0,8% 5,6% 10,6% 9,7%

Debt/EBITDA 12,2 10,4 21,0 13,1x 11,5x 13,2x

LTV incl. Shareholder loans 78% 49% 82% 51% 44% 50%

LTV excl. Shareholder loans 64% 49% 66% 51% 44% 50%

LTV secured debt 51% 16%* 41% 16% 0% 0%

RoE 22% 13% 12% 7% 24%

Disclaimer

Disclaimer and legal disclosures

Origin of the publication or report This publication or report originates from: Nordea Bank AB (publ), Nordea Bank Danmark A/S, Nordea Bank Finland Plc and Nordea Bank Norge ASA (together the

“Group Companies” or “Nordea Group”) acting through their unit Nordea Markets.

The Group Companies are supervised by the Financial Supervisory Authority of their respective home countries.

Content of the publication or report This publication or report has been prepared solely by Nordea Markets.

Opinions or suggestions from Nordea Markets may deviate from recommendations or opinions presented by other departments or companies in the Nordea Group.

The reason may typically be the result of differing time horizons, methodologies, contexts o other factors.

Opinions and price targets are based on one or more methods of valuation, for instance cash flow analysis, use of multiples, behavioural technical analyses of under-lying market movements in combination with considerations of the market situation and the time horizon. Key assumptions of forecasts, price targets and projections in research cited or reproduced appear in the research material from the named sources. The date of publication appears from the research material cited or repro-duced. Opinions and estimates may be updated in subsequent versions of the publication or report, provided that the relevant company/issuer is treated anew in such

later versions of the publication or report.

This report has been reviewed, for the purpose of verification of fact or sequence of facts, by the Issuer of the relevant financial instruments mentioned in the report

prior to publication. The review has led to changes of facts in the report.

Validity of the publication or report All opinions and estimates in this publication or report are, regardless of source, given in good faith, and may only be valid as of the stated date of this publication or

report and are subject to change without notice.

No individual investment or tax advice The publication or report is intended only to provide general and preliminary information to investors and shall not be construed as the basis for any investment deci-sion. This publication or report has been prepared by Nordea Markets as general information for private use of investors to whom the publication or report has been distributed, but it is not intended as a personal recommendation of particular financial instruments or strategies and thus it does not provide individually tailored in-vestment advice, and does not take into account the individual investor’s particular financial situation, existing holdings or liabilities, investment knowledge and expe-rience, investment objective and horizon or risk profile and preferences. The investor must particularly ensure the suitability of an investment as regards his/her

financial and fiscal situation and investment objectives. The investor bears the risk of losses in connection with an investment.

Before acting on any information in this publication or report, it is recommendable to consult one’s financial advisor.

The information contained in this publication or report does not constitute advice on the tax consequences of making any particular investment decision. Each inves-

tor shall make his/her own appraisal of the tax and other financial merits of his/her investment.

Sources This publication or report may be based on or contain information, such as opinions, recommendations, estimates, price targets and valuations which emanate from:

Nordea Markets’ analysts or representatives,

Publicly available information,

Information from other units of the Group Companies or other companies in the Nordea Group, or

Other named sources.

To the extent this publication or report is based on or contain information emanating from other sources (“Other Sources”) than Nordea Markets (“External Infor-mation”), Nordea Markets has deemed the Other Sources to be reliable but neither the companies in the Nordea Group, others associated or affiliated with said

companies nor any other person, do guarantee the accuracy, adequacy or completeness of the External Information.

The perception of opinions or recommendations such as Buy or Sell or similar expressions may vary and the definition is therefore shown in the research material or

on the website of each named source.

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incidental, special or consequential damages resulting from the information in this publication or report.

Risk information The risk of investing in certain financial instruments, including those mentioned in this document, is generally high, as their market value is exposed to a lot of differ-ent factors such as the operational and financial conditions of the relevant company, growth prospects, change in interest rates, the economic and political environ-ment, foreign exchange rates, shifts in market sentiments etc. Where an investment or security is denominated in a different currency to the investor’s currency of reference, changes in rates of exchange may have an adverse effect on the value, price or income of or from that investment to the investor. Past performance is not a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. When investing in individual shares, the investor

may loose all or part of the investments.

Conflicts of interest Companies in the Nordea Group, affiliates or staff of companies in the Nordea Group, may perform services for, solicit business from, hold long or short positions in,

or otherwise be interested in the investments (including derivatives) of any company mentioned in the publication or report.

To limit possible conflicts of interest and counter the abuse of inside knowledge, the analysts of Nordea Markets are subject to internal rules on sound ethical con-duct, the management of inside information, handling of unpublished research material, contact with other units of the Group Companies and personal account deal-ing. The internal rules have been prepared in accordance with applicable legislation and relevant industry standards. The object of the internal rules is for example to ensure that no analyst will abuse or cause others to abuse confidential information. It is the policy of Nordea Markets that no link exists between revenues from capi-tal markets activities and individual analyst remuneration. The Group Companies are members of national stockbrokers’ associations in each of the countries in which the Group Companies have their head offices. Internal rules have been developed in accordance with recommendations issued by the stockbrokers associations.

This material has been prepared following the Nordea Conflict of Interest Policy, which may be viewed at www.nordea.com/mifid.

Important disclosures of interests regarding this research material are available at:

http://www.nordea.com/sitemod/upload/Root/www.nordea.com%20-%20uk/AboutNordea/Markets_Discloser_Disclaimer.pdf

Distribution restriction

The securities referred to in this publication of report may not be eligible for sale in some jurisdictions. This research report is not intended for, and must not be distributed to private customers in Great Britain or the US.

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http://www.nordea.com/mifid

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Disclaimer

Nordea Markets analysts do not hold shares in the companies that they cover.

No holdings or other affiliations by analysts or associates.

Recommendations definitions

Outperform

Over the next three months, the fixed income instrument's total

return is expected to exceed the total return of the relevant

benchmark.

Market perform


return is expected to be in line with the total return of the rele-

vant benchmark.

Underperform


return is expected to be below the total return of the relevant

benchmark.

All research is produced on an ad hoc basis and will be updat-

ed when the circumstances require it.

Distribution of recommendations

Market-making obligations and other significant

financial interests

Nordea has no market making or other significant obligations in

Jernhusen.

Corporate Finance transactions

Nordea Markets has no ongoing or completed public invest-

ment banking transactions with Jernhusen. In view of Nordea’s

position in its markets, readers should however assume that

the bank may currently (or may in the coming three months

and beyond) be providing or seeking to provide confidential

investment banking services to the company/companies re-

ferred to in this report.

Material interest held by the issuer in shares issued

by Nordea

Nordea Markets Credit Sales and Research Institutional Sales Sweden Ted Karlsson [email protected] +46 8 614 78 98 Tomas Köhlberg [email protected] +46 8 614 6702 Utta Wester [email protected] +46 8 614 6916 Cecilia Tannerfeldt [email protected] +46 8 614 8753 Martin Andersson [email protected] +46 8 614 82 14 Philip Erlandsson [email protected] +46 8 614 67 09 Institutional Sales Finland Jani Lindholm [email protected] +358 9 36950242 Henrik Haakana [email protected] +358 9 369 50214 Patrik Grönfors [email protected] +358 9 396 50354 Institutional Sales Finland Henrik Nielsen [email protected] +45 3333 1637 Lisbeth Rosendal [email protected] +45 3333 1869 Palle Lund Hansen [email protected] +45 3333 1635

Institutional Sales Norway Julie Ellneby [email protected] +47 22 48 77 06 Erich Normann [email protected] +47 2248 7782 Espen Froyn [email protected] +47 2248 7747 Kristian Sørensen [email protected] +47 2248 7846 John Hoel [email protected] +47 2248 7785 Petter Hermansen [email protected] +47 2248 7719 Hege M. Schuessler [email protected] +47 2248 7806 Morten Frimann-Dahl [email protected] +47 22 48 77 84 Stein Morten Sæther [email protected] +47 2248 7876 Kristoffer Johansen [email protected] +47 2248 7717 Christian Malde [email protected] +47 2248 7863 Kristoffer Solem Sletten [email protected] +47 22 48 79 50

Credit Research Mark Schindele [email protected] +46 8614 8201 Industrials & Utilities Andreas Zsiga [email protected] +46 8614 6203 Industrials Elina Kaltie [email protected] +358 9 369 59009 Pulp & Paper, Finnish Industrials Lars Kirkeby [email protected] +47 2248 4264 Norwegian Industrials Lars Husby Erichsen [email protected] +47 2248 7951 Norwegian Financials Nadia Bendriss nadia. [email protected] +47 2248 7956 Offshore & Oil Services Kristoffer B. Pedersen [email protected] +47 22 48 79 80 Offshore & Oil Services Anders R. Karlsen [email protected] +47 2248 4119 Shipping Morten Heiner Pedersen [email protected] +45 3333 1620 Credit Strategy & DK Industrials Michael Sandfort, CFA [email protected]

+45 3333 1621

Nordic Financials

Josefine Lund Christiansen

[email protected]

Nordea Markets is the name of the Markets departments of Nordea Bank Norge ASA, Nordea Bank Sverige AB (publ), Nordea Bank Finland Plc and

Nordea Bank Danmark A/S. Copyright Nordea Markets, 2001. Not approved for publication in the United States.

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Nordea Bank Sverige AB (publ)

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SE-105 71 Stockholm +46 8 614 7000

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Documents

Credit Research - Jernhusen...portfolio value of about 25% 2005-2011, following the 2012 disposal of Kungsbrohuset in Stockholm, but is now on the rise given investments in the Stockholm