Fixed Income Research Corporate Bond Strategy · 11/4/2016 · Corporate Bond Strategy November 2016 11/2016 No. 3. ... or the referendum on the constitution in Italy on 4 December

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Topics Page

Market environment Market overview 2

Primary market 4

Focus topic M&A 6

ECB - tracker Monthly analysis of the CSPP 8

CDS performance October characterised by a sideways trend 12

Rating changes In the period from 01.10.2016 to 31.10.2016 14

New issues In the period from 01.10.2016 to 31.10.2016 16

Annex Charts & Diagrams 18

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Corporate Bond Strategy 4 November 2016 No. 3

NORD/LB Fixed Income Research Page 2 of 24

Market environment Market overview

IMF cuts growth forecast in

its World Economic Outlook

ECB defers decision on the

continuation of its bond

purchase programme

Analysts:

Martin Strohmeier

Kai Witt

The International Monetary Fund has again cut its forecast figures for the

global economy. Explicitly, the IMF views persistently weak economic growth

in industrialised countries with concern. In the USA, falling corporate

investment combined with higher interest rates could have a negative impact

on economic activity. The IMF also sees the risk of a further escalation in

economic protectionism. The looming signs of a hard Brexit provide the

potential for economic growth to further weaken in 2017. The reports by the

OECD, ECB and IMF view the widespread lack of investment (e.g. in plant,

machinery, transport equipment etc.) as the main cause of the poor

prospects for the economy. In particular, the IMF sees a fall in cross-border

trade here. The signals transmitted are only somewhat more positive for

emerging markets.

Meanwhile, the expected decision on the manner in which the ECB will

continue its bond purchase programme has been deferred until the final

meeting of the year in December. There have been no statements about any

CSPP tapering or CSPP expansion (or its future form). As a result, the

distortion of financial markets is continuing. Fundamental risks such as Brexit

or the referendum on the constitution in Italy on 4 December are being

completely ignored by the market. The IMF’s future participation in rescuing

Greece also still has to be negotiated. The measures taken by the major

central banks are gradually becoming less effective. The positive effects of

monetary policy are increasingly offset by negative effects. Low interest rates

are causing fundamental damage and massive mispricing on financial

markets. The credibility of central banks is a matter of discussion.

Corporates are running share buyback programmes, which are driven by

debt provided at low rates, and are consequently not investing. The flood of

cheap funds is driving more and more investors into asset classes and

Non-IG corporate bonds, which are not consistent with their appetite for risk.

As long as the central bank is active on the corporate market as a buyer,

investors will carry on buying enthusiastically in their search-for-yield battle.

In this environment, the corporate secondary market is becoming less and

less liquid. Primary market issues are heavily oversubscribed (3 times on

average). However, the nervousness felt by market participants was also

apparent, particularly in the last week of October when yields on sovereign

bonds succumbed to a real sell-off. Yields on IG corporate bonds were not

spared this movement in the market either.



More restrictive credit standards among corporates

Country

Enterprises House purchase Consumer credit

Credit standards Demand Credit standards Demand Credit standards Demand

Q2/16 Q3/16 Q2/16 Q3/16 Q2/16 Q3/16 Q2/16 Q3/16 Q2/16 Q3/16 Q2/16 Q3/16

Euro

area -7 0 17 11 -2 -4 30 23 -5 -4 21 32

Germany -3 -3 6 6 28 10 7 -10 0 -3 26 19

Spain 0 0 0 -20 -11 -11 -11 -11 -10 -10 0 0

France -14 0 26 54 -15 -24 40 52 0 0 30 58

Italy -13 0 25 -13 -38 0 50 63 -25 -13 25 63

Nether-

lands. 0 0 21 19 0 0 74 56 0 0 0 31

Source: ECB, NORD/LB Fixed Income Research

ECB’s monetary policy is not

resulting in increased

demand for credit

The Bank Lending Survey in the ECB’s quarterly survey of just under 150

banks in the entire eurozone, which was published in October, shows a dete-

riorating picture. The survey confirmed what many economists had already

forecast. The central bank’s transmission mechanism does not seem to be

functioning the way it is continuously presented by the ECB meaning that the

defined targets are not reached. It is clear from this report that the number of

financial institutions that expect demand for credit to rise in the next three

months is falling (11% in Q3/2016 compared with 17% in Q2/2016). In the

meantime, financial institutions are even planning to make their credit stand-

ards more stringent (for the first time since 2014). This observation is particu-

larly true of loans with a longer term and, in particular, for corporates (0% in

Q3/2016 compared with -7% in Q2/2016). Initial speculation among analysts

indicates that the ECB’s ultra-loose low interest rate policy is the main cause

for credit guidelines becoming more stringent. Banks, whose business model

has been suffering for some time, are apparently trying to offset the pressure

on their margins with higher fees and risk premiums (low interest rates and

flat yield curves have negative effects on the profitability of credit business,

as they make bank lending unattractive). At the ECB’s October press con-

ference, Mario Draghi meanwhile attempted to neutralise a question on this

subject. In response to a question as to how the ECB can justify the fact that

its Corporate Sector Purchase Programme is leading to distortions in the

market and to credit risks being mispriced as well as to an increase in large

caps acquiring small and medium-sized enterprises (SMEs), Mario Draghi

replied as follows: “I do not have to justify it. I only say that it is not true.

SMEs actually benefit from both the corporate bond programme and the

covered bond programme. The programmes have increased new issues by

large companies, but at the same time created leeway in the provision of

bank loans.” This actually contradicts the Bank Lending Survey mentioned

above, which shows matters differently.



Market environment Primary market

Golden autumn drives corpo-

rate bond market towards a

record level

After a scarcely perceptible summer lull, the months of September and Oc-

tober have confirmed their traditional reputation as strong months in terms of

issuance activity and ensured that the corporate bond market is likely to

equal the issuance record from 2014. While EUR 357.5bn was issued on the

corporate bond market in 2014, EUR 331.6bn had already been issued on

31 October 2016.

Trend in issues on the corporate bond market

0

50

100

150

200

250

300

350

400

2009 2010 2011 2012 2013 2014 2015 2016

Am

ount

issued in E

UR

bn

Source: Bloomberg, NORD/LB Fixed Income Research

New issues We observed an issuance volume of EUR 38.1bn in October. A large part of

this was accounted for by Danone, which exploited favourable market

developments and secured attractive conditions for future tasks. The French

group raised funding of EUR 6.2bn in total, spread across five bonds with

different maturities. The books were almost 4-times oversubscribed. In line

with their preferences and requirements, investors could choose between

maturities of 2 to 12 years. All bonds, with the exception of the floating-rate

bond, were issued at par and have an optional special termination right

(mandatory redemption call) at 101%. The drinks and food group may

possibly make use of its termination right if it is unsuccessful in its planned

acquisition of WhiteWave. Although Danone recorded the weakest quarterly

growth for more than a decade, the issue may be described as a success.

The question as to whether investors realised in advance that a mandatory

redemption call as at 31 October 2017 was included in the bond conditions

remains open. If executed, this could lead to book losses having to be

realised as at 31 October 2017. Apart from additional European issues, such

as TUI (EUR 0.3bn), Telefonica (EUR 2.0bn) or Sixt (EUR 0.25bn),

companies from outside the eurozone were also active in the local market.

The New Zealand telecommunications provider Chorus (EUR 0.5bn) was

just as successful in raising funding as the US company Verizon (EUR

3.25bn).



K+S bonds under observa-

tion following rating down-

grade

As part of its guidelines, the ECB has stipulated that it invests solely in in-

vestment grade bonds. There has so far been no reliable statement from the

central bankers in response to the question as to what happens if an issuer

loses its investment grade status, as happened to the Kassel-based salt and

fertiliser specialist K+S on 21 October. The rating agency S&P recently ex-

amined the creditworthiness of K+S more closely and cut its long-term cre-

ditworthiness from “BBB-” to “BB+”. We assume that the ECB and in this

case the German Bundesbank acts as a buy and hold investor and will keep

the bonds in its portfolio despite the downgrade. This presumption is con-

firmed by the data recently (on Monday, 31 October 2016) published by the

central bank, since the K+S bonds purchased to date within the framework of

the CSPP are currently still on the purchase list.

Lively trade in K+S bonds Three outstanding K+S bonds are currently available on the market. The

most significant trading in the bond, which runs until 26 December 2021 and

has a 4.125% coupon, took place in the 42nd

calendar week. After investors

initially cashed up, purchases also restarted at the beginning of the previous

week (43rd

calendar week). The bond is currently listed at 111.61%, which

equates to a yield of 1.63%.

An overview of selected new issues

ISIN Ticker CPN Maturity AMT_

IS-SUED

ISSUE_DT

Rating Issue

Spread (ms)

Issue Spread (Bench-mark)

Current Spread (ASW)

Moody’s S&P Fitch

XS1505554698 TELEFO 0.318 17.10.2020 1250 17.10.2016 Baa2 BBB BBBe 91 45


XS1505148350 BMW 0 17.10.2018 550 17.10.2016 A2 A+ 23

XS1506385001 BMW 0 17.10.2018 225 19.10.2016 A2e 34

XS1504103984 TUIGR 2.125 26.10.2021 300 26.10.2016 Ba2 BB- 171

XS1505573482 SRGIM 0.875 25.10.2026 1250 25.10.2016 Baa1 BBB BBB+ 50 88 49

FR0013213303 EDF 1.875 13.10.2036 750 13.10.2016 A3 A- A- 115 172 112

FR0013213295 EDF 1 13.10.2026 1750 13.10.2016 A3 A- A- 65 102 62

As at: 01.11.2016, 17:00; Source: Bloomberg, NORD/LB Fixed Income Research



Focus topic M&A

M&A approaching the final

stage of the cycle

According to a report by the rating agency Moody’s, mergers, acquisitions

and disinvestments tend to accelerate when profits reach a cyclical high. As

soon as it is clear that organic income is not rising sufficiently fast to achieve

adequate growth in earnings, it is apparent that companies increasingly ven-

ture into the M&A market. Corporates then try to create growth by selling the

underperforming areas of their business or attempting to merge with a com-

petitor. According to Moody’s, two cyclical peaks were observed for the an-

nual average of pre-tax profits from current production in the past, which

occurred in Q4 1997 and Q4 2006. The two previous records in total M&A

activities, which involved at least one U.S. company as purchaser or target,

occurred in Q1 2000 and Q3 2007 according to Moody’s. The deterioration in

American companies’ balance sheet ratios is viewed as another sign of

reaching the final phase in the corporate cycle. Shares are currently being

bought back to increase profits and offset the downward trend in earnings.

There are also increasing signs of share buybacks in Europe. Here, howev-

er, the effect is driven by the CSPP. Several companies are tuning their bal-

ance sheets through share buybacks (e.g. Koninklijke Philips NV, Deutsche

Post AG), and the option of converting borrowings without making any addi-

tional investment (such as Koninklijke KPN NV, TUI AG, et al.).

Increased M&A activities on

the left hand side of the At-

lantic

Currently, market participants can observe increased M&A activities on the

left hand side of the Atlantic. In October, the U.S. telecoms giant AT&T and

the media group Time Warner announced their planned merger. It remains

to be seen whether the USD 109bn deal will be accepted by the competition

authorities, as there have been signs of reservations and even resistance

among American politicians. The tobacco giant BAT also announced plans

to take over Reynolds American. BAT would like to acquire the remaining

57.8% in Reynolds American, which would result in a purchase price of over

USD 45bn at the current price of USD 54.9 per share. As a consequence of

the planned takeover, the leading rating agencies cut the credit watch to

negative since the indications are that there has been a deterioration in the

credit ratios. The number of deals mentioned suggests that the M&A cycle

has entered its final phase in the USA. But it is not just in the world’s largest

economy that M&A activity is buoyant. The U.S. industrial giant General

Electric caused a stir with a failed acquisition of the German 3D printer man-

ufacturer SLM Solutions by pulling an alternative “rabbit” out of the hat (and

making the hedge fund veteran Paul Singer look rather old in the process).



M&A activities are also

picking up in Europe

But M&A activities are also gradually picking up in Europe, albeit they are

still some way from the American level. Since the ECB is still in a phase of

quantitative easing compared with the Fed and initial discussions about

tapering only started recently, the less advanced M&A cycle on the old

continent also reflects the diverging economic cycles on this and the other

side of the Atlantic. Supported by the ECB’s CSPP programme, large

corporates can raise funding on the capital market at ultra-low interest rates

and are even benefiting from an additional investor on the primary market,

namely the European Central Bank.

Bayer-Monsanto and

Fresenius-Quirónsalud

In the USD 57bn Bayer-Monsanto takeover, the group from Leverkusen aims

to finance parts of the investment via senior and subordinate debt (bridge

financing). A EUR 5bn convertible issue is currently under discussion on the

market. According to media reports from the news agency Bloomberg,

Fresenius SE & Co is also toying with the idea of issuing bonds with maturi-

ties of 5, 7, 10 and 15 years to finance the purchase of the largest, private

Spanish hospital operator Quirónsalud. Here, it should be noted that not all

outstanding bonds issued by Fresenius qualify for the CSPP. New issues

could therefore be structured in such a way that they meet all requirements

for the CSPP. In addition to the technical details of the CSPP programme

(see NORD/LB publication dated 21 April 2016: Corporate Sector Purchase

Programme – CSPP – ECB provides details), the ECB explicitly stipulates

the requirements which a bond must fulfil to be ECB-eligible in its guidelines

2016/64 dated 18 November 2015 (see: http://bit.ly/2frEftV). We would point

out that eligibility as ECB collateral is a necessary but insufficient condition

for the CSPP. Investors can check ECB-eligibility per ISIN via the ECB

webpage https://mfi-assets.ecb.int/queryEa.

http://bit.ly/2frEftV

https://mfi-assets.ecb.int/queryEa



ECB - Tracker Monthly analysis of the CSPP

CSPP data published As usual last Monday, the ECB published the bonds purchased by the six

national central banks within the framework of the CSPP. A total of six new

ISINs were determined for the previous week, meaning that the number of

purchased bonds rose to 686. Accordingly, bonds issued by Tennet, Talanx,

Deutsche Post, Enagas, Snam and Terna were purchased last week. In total

the volume purchased comes to EUR 37.8bn and is spread across an aver-

age amount “held per ISIN” of EUR 55.1m. Assuming that national central

banks maintain their current purchase tempo, the extrapolated total volume

comes to ca. EUR 78.4bn as at March 2017.

“Purchasing error” by the

ECB

On 26 September, a bond (AKEFP 4 10/25/17 Corp ISIN: FR0010955559)

issued by the French company Arkema was included for the first time on the

central bank’s purchase list. This bond was replaced on the purchase list by

another bond issued by the same group (FR0012452191) on 17 October

2016. The bond purchased previously does not comply with ECB require-

ments and is therefore not eligible within the framework of the CSPP.

In this section, we publish updates on the purchase of corporate bonds re-

solved by the ECB. We provide an overview of the development of purchas-

es. The issuers listed in italics were purchased for the first time in the previ-

ous month.

New ISINs included on the ECB purchase list for the CSPP

ISIN Issuer Remaining

term Outstanding volume [bn]

Yield remaining term

BE0002443183 EANDIS SYSTEM OPERATOR C 6.9 0.50 0.439

BE0002470459 EANDIS SYSTEM OPERATOR C 12.5 0.55 1.151

XS1135277140 SHELL INTERNATIONAL FIN 10.2 1.25 0.786

XS1501162876 AMADEUS CAP MARKT 3.9 0.50 0.229

FR0012206993 AEROPORTS DE PARIS 8.4 0.50 0.556

FR0013173432 SUEZ 11.5 0.50 0.906

FR0013210408 VEOLIA ENVIRONNEMENT SA 6.9 0.60 0.525


XS0907301260 WOLTERS KLUWER NV 6.4 0.70 0.478

XS1505130572 REN FINANCE BV 8.3 0.20 1.593

DE000A169NC2 DAIMLER AG 11.5 1.25 0.981

DE000A2BPA51 BASF SE 14.9 0.50 1.108

XS0554975325 DEUTSCHE BAHN FINANCE BV 6.0 0.50 0.102

XS0875797515 DEUTSCHE TELEKOM INT FIN 11.2 0.75 1.026

XS1501363425 LANXESS AG 4.9 0.50 0.378

XS1501367921 LANXESS AG 9.9 0.50 1.347

XS0462999573 TELEFONICA EMISIONES SAU 3.0 1.75 0.201



FR0012452191 ARKEMA 8.2 0.70 0.843

FR0012173862 PERNOD RICARD SA 7.9 0.65 0.759

FR0012949923 SUEZ 8.9 0.50 0.628

XS1505132602 SODEXO 10.5 0.60 0.954



XS0177089298 ENEL INVESTMENT HLDG BV 6.9 0.30 0.692

XS0794393396 TELECOM ITALIA SPA 2.1 0.58 0.494

XS1493322355 ENI SPA 7.9 0.90 0.810

XS1493328477 ENI SPA 11.9 0.60 1.329

XS1493724584 DEUTSCHE BAHN FINANCE BV 11.9 0.50 0.796

FR0011318658 ELECTRICITE DE FRANCE SA 6.4 2.00 0.594

FR0011332196 BOUYGUES SA 6.2 0.70 0.402

FR0012146777 SANOFI 5.4 1.00 0.234

FR0012384634 PUBLICIS GROUPE SA 5.1 0.70 0.400

FR0013170834 FONCIERE DES REGIONS 9.5 0.50 1.274



FR0013213683 SANEF SA 12.0 0.30 1.157

FR0013213709 WENDEL SA 6.5 0.30 1.040

XS1376614118 UNIBAIL-RODAMCO SE 9.4 0.50 0.837

XS0690406243 OMV AG 4.9 0.50 0.233

XS0973806861 ELISA OYJ 4.2 0.30 0.336

XS1505896735 CRH FINANCE DAC 12.0 0.60 1.358


XS1052843908 ENAGAS FINANCIACIONES SA 5.4 0.75 0.301


DE000A1ZY971 VONOVIA FINANCE BV 3.4 0.50 0.222


XS0632659933 LINDE FINANCE BV 4.6 0.60 0.130


XS0485616758 TENNET HOLDING BV 5.3 0.50 0.185

DE000TLX2102 TALANX AG 9.7 0.50 0.730

XS0795877454 DEUTSCHE POST FINANCE 5.7 0.50 0.282

XS1508831051 ENAGAS FINANCIACIONES SA 10.0 0.50 0.911

XS0806449814 SNAM SPA 2.2 0.58 -0.032

XS1503131713 TERNA SPA 11.9 0.75 1.204

Source: ECB, NORD/LB Fixed Income Research

CSPP Diagrams One diagram – four statements [EURm]

Source: ECB, Bloomberg, NORD/LB Fixed Income Research / lhs`means the outer left Y-axis and rhs´ the outer right Y-axis



Yield overview CSPP portfolio

-0,50

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

0 2 4 6 8 10 12 14 16 18 20

Yie

ld i

n %

Years to maturity

Basic Materials Communications Consumer, Cyclical Consumer, Non-cyclical Diversified Energy Financial Government Industrial Technology Utilities

Source: ECB, Bloomberg, NORD/LB Fixed Income Research

Yield overview CSPP portfolio (up to 10 years maturity)

-0,50

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

0 1 2 3 4 5 6 7 8 9 10

Yie

ld i

n %

Years to maturity

Basic Materials Communications Consumer, Cyclical Consumer, Non-cyclical Diversified Energy Financial Government Industrial Technology Utilities


Classification by outstanding volume Rating distribution according to the Bloomberg

Composite

0

50

100

150

200

250

300

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

<250mn 250 to <500mn 500 to < 1bn >= 1bn

Amount Outstanding in EUR Distribution number weighted (rhs)

2% 8%

6%

10%

17%

25%

20%

9%3%

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

Source: ECB, Bloomberg, NORD/LB Fixed Income Research Source: ECB, Bloomberg, NORD/LB Fixed Income Research



Distribution by central bank Distribution by central bank and sector

0

20

40

60

80

100

120

140

160

180

200

# p

urc

ha

sed

Bo

nd

s

0

20

40

60

80

100

120

140

160

180

200

# p

urc

ha

sed

Bo

nd

s

Diversified

Technology

Government

Basic Materials

Industrial

Energy

Financial

Consumer, Cyclical

Communications

Consumer, Non-cyclical


Top 15 purchased companies Distribution by sector and central bank

0

2

4

6

8

10

12

14

16

18

20

# p

urc

ha

sed

Bo

nd

s

0

10

20

30

40

50

60

# p

urc

ha

sed

Bo

nd

s

DeutscheBundesbank

Banque deFrance

NB van Belgie

Banca d'Italia

Banco deEspana

SuomenPankki


Distribution of ISINs purchased within the framework of the CSPP

Country Number of

bonds %

distribution Outstanding

volume %

distribution

Ø remaining

term in years

Ø remaining term of all

bonds

Difference in years

Germany 168 24.5% 125.2 25.5% 5.1 5.9 -0.8

France 179 26.1% 133.7 27.3% 6.3 5.9 0.4

Netherlands 55 8.0% 36.6 7.5% 6.4 5.9 0.5

Italy 77 11.2% 60.4 12.3% 5.7 5.9 -0.2

Spain 67 9.8% 50.1 10.2% 6.3 5.9 0.4

Belgium 27 3.9% 22.3 4.5% 7.6 5.9 1.7

Austria 21 3.1% 10.2 2.1% 5.3 5.9 -0.6

Finland 13 1.9% 5.4 1.1% 5.0 5.9 -0.9

Others 79 11.5% 46.4 9.5% 5.9 5.9 0.0

Total / aver-age

668 100% 490.3 100.0% 5.9 5.9 0.0




CDS performance October characterised by a sideways trend

Risk premiums at the level of

the previous month

In retrospect, the month of October was characterised by a sideways trend

both in the case of the synthetic indices and the cash bonds. The iTraxx

Europe traded in a range between 75bp and 70bp (as at 31.10.: 73bp). Its

more risky counterpart, the Pendant iTraxx Crossover, traded between

338bp and 318bp (as at 31 October: 331bp). Having seen credit risk premi-

ums initially fall slightly in October, there was a slight countermovement in

response to the ECB’s tapering discussion. This took place after the ECB

meeting on 20 October and has continued to the present date. Here, the

main cause is seen as market participants’ concerns regarding an end to

monetary policy. Consequently, there was a sell-off of European sovereign

bonds. The undertow of the increase in yields on long-dated sovereign

bonds also had a corresponding impact on corporates. As is well known,

interest rates can rise again.

Movement in spreads: iTraxx Europe vs. iTraxx Xover

0

50

100

150

200

250

300

350

400

450

500

0

50

100

150

200

250

bp

bp

iTraxx Europe (lhs) iTraxx Xover (rhs) iBoxx € IG Corporates (lhs) iBoxx € High Yield (rhs)

ECB-Session ECB-Session Brexit- Referendum10.03.2016 21.04.2016 23.06.2016

As at: 4 October 2016 – 18:00 (CET) Source: Bloomberg, NORD/LB Fixed Income Research

Corporate Bond Strategy 01. November 2016 No. 3


Rating changes In the period from 01 Oct. 2016 to 31 Oct. 2016

Date Coun-try

Company Agency Type of rating Old rating New rating

28.10.16 NL innogy Finance BV Fitch Senior Unsecured Debt BBB *- BBB *+

28.10.16 IT Assicurazioni Generali SpA AMBest LT Credit Outlook STABLE

28.10.16 IT Assicurazioni Generali SpA AMBest Final Strength Outlook STABLE

28.10.16 ES Merlin Properties Socimi SA Moody's Senior Unsecured Debt Baa2

28.10.16 ES Merlin Properties Socimi SA Moody's Outlook STABLE

27.10.16 IT Servizi Assicurativi del Commercio Estero SpA

Fitch Outlook NEG

27.10.16 IT Atlantia SpA Moody's Long Term Rating (P)Baa2

27.10.16 FR AXA SA S&P ST Foreign Issuer Credit A-2 A-1

27.10.16 FR AXA SA S&P Outlook STABLE

27.10.16 FR AXA SA S&P ST Local Issuer Credit A-2 A-1

27.10.16 FR AXA SA S&P LT Local Issuer Credit A- A

27.10.16 FR AXA SA S&P LT Foreign Issuer Credit A- A

27.10.16 ES Metrovacesa SA S&P LT Foreign Issuer Credit BBB NR

27.10.16 ES Metrovacesa SA S&P LT Local Issuer Credit BBB NR

27.10.16 SE Molnlycke Holding AB S&P ST Foreign Issuer Credit A-2 A-3

27.10.16 SE Molnlycke Holding AB S&P LT Local Issuer Credit BBB BBB-

27.10.16 SE Molnlycke Holding AB S&P Outlook STABLE

27.10.16 SE Molnlycke Holding AB S&P ST Local Issuer Credit A-2 A-3

27.10.16 SE Molnlycke Holding AB S&P LT Foreign Issuer Credit BBB BBB-

27.10.16 SE SKF AB S&P LT Local Issuer Credit BBB BBB-

27.10.16 SE SKF AB S&P LT Foreign Issuer Credit BBB BBB-

26.10.16 SE SKF AB S&P Outlook STABLE

26.10.16 US Prologis LP Moody's Senior Unsecured Debt Baa1 A3

26.10.16 US Prologis LP Moody's Long Term Rating A3

25.10.16 US Prologis LP Moody's Outlook STABLE

24.10.16 FR Gecina SA S&P Outlook POS

24.10.16 US AT&T Inc. EJR LC Senior Unsecured BBB+ BBB

24.10.16 US AT&T Inc. Moody's Long Term Rating Baa1 *-

24.10.16 US AT&T Inc. Fitch LT Issuer Default Rating A- A- *-

24.10.16 US AT&T Inc. Moody's Senior Unsecured Debt Baa1 Baa1 *-

24.10.16 US AT&T Inc. S&P LT Local Issuer Credit BBB+ BBB+ *-

24.10.16 US AT&T Inc. S&P LT Foreign Issuer Credit BBB+ BBB+ *-

24.10.16 US AT&T Inc. Fitch Senior Unsecured Debt A- A- *-

24.10.16 US AT&T Inc. EJR FC Senior Unsecured BBB+ BBB

24.10.16 GB BAT International Finance PLC Fitch Short Term F2 F2 *-

24.10.16 GB BAT International Finance PLC Fitch Senior Unsecured Debt A- A- *-

24.10.16 DE Continental AG Fitch Outlook STABLE

24.10.16 DE Continental AG Fitch Senior Unsecured Debt BBB BBB+

24.10.16 DE Continental AG Fitch LT Issuer Default Rating BBB BBB+

24.10.16 US Continental Rubber of America Corp Fitch Senior Unsecured Debt BBB BBB+

24.10.16 US Time Warner Inc. S&P LT Foreign Issuer Credit BBB BBB *+

24.10.16 US Time Warner Inc. S&P LT Local Issuer Credit BBB BBB *+

24.10.16 US Time Warner Inc. EJR FC Senior Unsecured BBB+ BBB



24.10.16 US Time Warner Inc. EJR LC Senior Unsecured BBB+ BBB

24.10.16 US Walgreens Boots Alliance Inc. EJR LC Senior Unsecured BBB+ BBB

21.10.16 US Walgreens Boots Alliance Inc. EJR FC Senior Unsecured BBB+ BBB

21.10.16 NL Akzo Nobel NV S&P LT Local Issuer Credit BBB+ A-

21.10.16 NL Akzo Nobel NV S&P LT Foreign Issuer Credit BBB+ A-

21.10.16 NL Akzo Nobel NV S&P ST Local Issuer Credit A-2 A-1

21.10.16 NL Akzo Nobel NV S&P Outlook STABLE

21.10.16 NL Akzo Nobel NV S&P ST Foreign Issuer Credit A-2 A-1

21.10.16 GB BAT International Finance PLC Moody's Short Term P-2 P-2 *-

21.10.16 GB BAT International Finance PLC Moody's Senior Unsecured Debt A3 A3 *-

21.10.16 GB BAT International Finance PLC Moody's Issuer Rating A3 A3 *-

21.10.16 GB BAT International Finance PLC Moody's Long Term Rating A3 *-

21.10.16 ES Metrovacesa SA S&P LT Local Issuer Credit BBB- *+ BBB

21.10.16 ES Metrovacesa SA S&P LT Foreign Issuer Credit BBB- *+ BBB

19.10.16 GB National Grid Gas Finance PLC Moody's Long Term Rating A3 *-

19.10.16 DE Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen

AMBest LT Credit Outlook STABLE

19.10.16 DE Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen

AMBest Finl Strength Outlook STABLE

19.10.16 HK Shanghai Electric Newage Co Ltd Moody's Outlook STABLE

18.10.16 AT Verbund AG S&P Outlook STABLE

18.10.16 ES Merlin Properties Socimi SA Moody's Issuer Rating Baa2

18.10.16 ES Merlin Properties Socimi SA Moody's Long Term Rating Baa2

18.10.16 ES Metrovacesa SA Moody's Senior Unsecured Debt Baa3 *+ Baa2

18.10.16 ES Metrovacesa SA Moody's Issuer Rating Baa3 *+ Baa2

18.10.16 ES Metrovacesa SA Moody's Long Term Rating Baa2

17.10.16 ES Metrovacesa SA Moody's Outlook STABLE

17.10.16 FR Societé Des Autoroutes Paris-Rhin-Rhone Fitch Outlook POS

17.10.16 US United Parcel Service Inc. Moody's Outlook STABLE

17.10.16 US United Parcel Service Inc. Moody's Senior Unsecured Debt Aa3 A1

14.10.16 US United Parcel Service Inc. Moody's Long Term Rating A1

14.10.16 BE Elia System Operator SA/NV Creditre-form

Outlook STABLE

14.10.16 BE Elia System Operator SA/NV Creditre-form

LT Issuer Rating A

14.10.16 DE SAP SE Creditre-form

LT Issuer Rating A+

13.10.16 DE SAP SE Creditre-form

Outlook STABLE

13.10.16 US Carnival Corp S&P Outlook STABLE

13.10.16 US Carnival Corp S&P LT Foreign Issuer Credit BBB+ *+ A-

13.10.16 US Carnival Corp S&P LT Local Issuer Credit BBB+ *+ A-

13.10.16 FR Electricité de France SA JCR Outlook STABLE

12.10.16 FR Electricité de France SA JCR Foreign Currency LT Issuer Rating

AA+ AA

12.10.16 AE Emirates NBD PJSC CI Foreign Long Term A A+

12.10.16 AE Emirates NBD PJSC CI Financial Strength BBB+ A-

11.10.16 AE Emirates NBD PJSC CI Finl Strength Outlook STABLE

10.10.16 DE Merck KGaA S&P Outlook STABLE

10.10.16 US Blackstone Holdings Finance Co LLC S&P LT Local Issuer Credit A+

10.10.16 US Blackstone Holdings Finance Co LLC S&P Outlook STABLE

10.10.16 US Blackstone Holdings Finance Co LLC S&P LT Foreign Issuer Credit A+

07.10.16 GB Heathrow Funding Ltd Fitch Outlook POS



07.10.16 NL NN Group NV S&P ST Local Issuer Credit A-2 A-2 *-

07.10.16 NL NN Group NV S&P LT Foreign Issuer Credit A- A- *-

07.10.16 NL NN Group NV S&P LT Local Issuer Credit A- A- *-

07.10.16 NL NN Group NV S&P ST Foreign Issuer Credit A-2 A-2 *-

07.10.16 LU SELP FINANCE Sarl Moody's Outlook STABLE

07.10.16 LU SELP FINANCE Sarl Moody's Senior Unsecured Debt Baa2

07.10.16 LU SELP FINANCE Sarl Moody's Long Term Rating Baa2

07.10.16 FR Thales SA S&P Outlook STABLE

07.10.16 FR Thales SA S&P LT Foreign Issuer Credit BBB+ A-

06.10.16 FR Thales SA S&P LT Local Issuer Credit BBB+ A-

06.10.16 BE Eandis System Operator SCRL Moody's Senior Unsecured Debt A1 A1 *-

06.10.16 BE Eandis System Operator SCRL Moody's Long Term Rating A1 *-

05.10.16 BE Eandis System Operator SCRL Moody's Issuer Rating A1 A1 *-

05.10.16 PT Galp Gas Natural Distribuicao SA S&P Outlook STABLE

05.10.16 PT Galp Gas Natural Distribuicao SA S&P LT Local Issuer Credit BBB-

05.10.16 PT Galp Gas Natural Distribuicao SA S&P LT Foreign Issuer Credit BBB-

05.10.16 US Metropolitan Life Global Funding I Moody's Outlook STABLE

05.10.16 US Metropolitan Life Global Funding I Moody's Long Term Rating Aa3

03.10.16 US Metropolitan Life Global Funding I Moody's Senior Secured Debt Aa3 *- Aa3

04.10.16 GB SSE PLC Moody's Outlook STABLE

04.10.16 IT Edison SpA S&P LT Foreign Issuer Credit BBB- BB+

04.10.16 IT Edison SpA S&P ST Local Issuer Credit A-3 B

03.10.16 IT Edison SpA S&P Outlook STABLE



07.10.16 NL NN Group NV S&P LT Local Issuer Credit A- A- *-

07.10.16 NL NN Group NV S&P ST Foreign Issuer Credit A-2 A-2 *-

07.10.16 LU SELP FINANCE Sarl Moody's Outlook STABLE

07.10.16 LU SELP FINANCE Sarl Moody's Senior Unsecured Debt Baa2

07.10.16 LU SELP FINANCE Sarl Moody's Long Term Rating Baa2

07.10.16 FR Thales SA S&P Outlook STABLE

07.10.16 FR Thales SA S&P LT Foreign Issuer Credit BBB+ A-

06.10.16 FR Thales SA S&P LT Local Issuer Credit BBB+ A-

The selected information on ratings provided above is a selective range. As at: 04.11.2016 – 07:45 (CET) Source: Bloomberg, NORD/LB Fixed Income Research



New issues In the period from 01.10.2016 to 31.10.2016

ISIN TICKER CPN MATURITY AMT_ISSUED ISSUE_DT Rating Issue Spread Issue Spread Current Spread

Moody's S&P Fitch (ms) (to Benchmark) (ASW)

XS1497312295 HUWHY 0.875 03.10.2024 1000 03.10.2016 A3 A- A- 138 72

XS1491985476 EDRSM 8.500 01.08.2021 435 04.10.2016 B3 B 958 773

XS1491985393 EDRSM 8.5 01.08.2021 435 04.10.2016 B3 B 958 774

FR0013210416 VIEFP 0.927 04.01.2029 500 04.10.2016 Baa1 BBB BBB 50 107 47

FR0013210408 VIEFP 0.314 04.10.2023 600 04.10.2016 Baa1 BBB BBB 82 32

XS1405770907 ENBW 3.375 05.04.2077 725 05.10.2016 Baa2 BBB- BBB 363 409 316

XS1498935391 DEAFIN 7.5 15.10.2022 400 05.10.2016 B+ BB 805 655

XS1498935474 DEAFIN 7.5 15.10.2022 400 05.10.2016 B+ BB 805 656

XS1501166869 TOTAL 3.369 1500 06.10.2016 A2 A- 310 349 292

XS1501162876 AMSSM 0.125 06.10.2020 500 06.10.2016 Baa2 BBB 38 88 28

XS1501167164 TOTAL 2.708 1000 06.10.2016 A2 A- 275 322 259

FR0013209715 ATOFP 1.444 06.10.2023 300 06.10.2016 151

DE000A2BPA51 BASGR 0.875 06.10.2031 500 06.10.2016 A1 A A+ 38 93 26

XS1500468589 SCHALL 8 01.10.2021 210 07.10.2016 B2 858 708

XS1500463358 IDRSM 1.25 07.10.2023 250 07.10.2016 638

XS1501367921 LXSGR 1 07.10.2026 500 07.10.2016 Baa3 BBB- 85 124 81

XS1501363425 LXSGR 0.25 07.10.2021 500 07.10.2016 Baa3 BBB- 50 92 35

XS1500468407 SCHALL 8 01.10.2021 210 07.10.2016 B2 858 707

XS1500600363 BDC 4.125 15.10.2026 200 10.10.2016 Ba3 BB- 422 359

XS1500600280 BDC 4.125 15.10.2026 200 10.10.2016 Ba3 BB- 422 359

XS1503131713 TRNIM 1 11.10.2028 750 11.10.2016 Baa1 BBB BBB+ 57 111 52

FR0013212958 AFFP 3.75 12.10.2022 400 12.10.2016 422 351

XS1503012038 FCACAP 0.41 12.02.2019 200 12.10.2016 NR BBBe 70

FR0013213303 EDF 1.875 13.10.2036 750 13.10.2016 A3 A- A- 115 172 112

FR0013213295 EDF 1 13.10.2026 1750 13.10.2016 A3 A- A- 65 102 62

XS1504057263 NWGLOV 7 15.10.2023 300 14.10.2016 B2 (P)B 765 656

XS1504194173 HERIM 0.875 14.10.2026 400 14.10.2016 Baa1 BBB 97 62

XS1505132602 SWFP 0.75 14.04.2027 600 14.10.2016 A- BBB+ 45 86 39

XS1500377517 ELPEGA 4.875 14.10.2021 375 14.10.2016 550 470

XS1504057008 NWGLOV 7 15.10.2023 300 14.10.2016 B2 (P)B 765 657

XS1505130572 RENEPL 2.5 12.02.2025 200 14.10.2016 Baa3e BBBe 129



XS1505148350 BMW 0 17.10.2018 550 17.10.2016 A2 A+ 23

FI4000223532 VVOYHT 1.625 17.10.2023 200 17.10.2016 160 208 139

XS1505884723 EZJLN 1.125 18.10.2023 500 18.10.2016 Baa1 BBB+ 125 172 119

XS1505890530 CNUNZ 1.125 18.10.2023 500 18.10.2016 Baa2 BBB 157 88

XS1505573995 WMG 4.125 01.11.2024 345 18.10.2016 Ba3 B 437 340

XS1505574027 WMG 4.125 01.11.2024 345 18.10.2016 Ba3 B 437 341

XS1505896735 CRHID 1.375 18.10.2028 600 18.10.2016 Baa2 BBB+ BBB 134 68



XS1506385001 BMW 0 17.10.2018 225 19.10.2016 A2e 34

FR0013213683 SANEFP 0.95 19.10.2028 300 19.10.2016 Baa1 48 102 47

XS1506615282 GOOEUR 1.625 20.10.2026 325 20.10.2016 Baa1 BBB 130 168 119

FR0013213709 MWDP 1 20.04.2023 300 20.10.2016 BBB- 144 87

XS1506612693 GOOEUR 0.875 20.10.2022 325 20.10.2016 Baa1 BBB 97 142 86

XS1508392625 ALATPF 3.75 500 20.10.2016 BB+ 438 486 417

XS1505568136 TENN 1.25 24.10.2033 500 24.10.2016 A3 A- 116 49

XS1405767515 UPS 1 15.11.2028 500 24.10.2016 A1 A+ 99 36

XS1508912646 ACEIM 1 24.10.2026 500 24.10.2016 Baa2 BBB+ 77 115 73

XS1389996882 NWL 3.75 01.10.2021 260 25.10.2016 Baa3e BBB- 121

XS1505573482 SRGIM 0.875 25.10.2026 1250 25.10.2016 Baa1 BBB BBB+ 50 88 49

XS1508586150 SEGPLP 1.25 25.10.2023 500 25.10.2016 Baa2 BBB+e 120 168 112

XS1508588875 SRGIM 0 25.10.2020 500 25.10.2016 Baa1 BBB BBB+ 20 67 21

XS1504103984 TUIGR 2.125 26.10.2021 300 26.10.2016 Ba2 BB- 171

FR0013215415 RALFP 5.25 01.02.2022 200 26.10.2016 574

XS1405770576 CBLCSY 5 15.10.2023 350 26.10.2016 B1 B+ 535 432

XS1405767788 CBLCSY 5 15.10.2023 350 26.10.2016 B1 B+ 535 434

XS1508831051 ENGSM 0.75 27.10.2026 500 27.10.2016 A- A- 42 79 39

XS1509942923 COLSM 1.45 28.10.2024 600 28.10.2016 BBB- 135 182 132

Source: Bloomberg, NORD/LB Fixed Income Research



Annex Charts & Diagrams

iBoxx € Corporates-Comparison of Issues iBoxx € Corporates-Classification

0

50

100

150

200

250

300

1Y-3Y 3Y-5Y 5Y-7Y 7Y-10Y >10Y

2016

2015

Financials

Basic Materials

Consumer Goods

Consumer Services

Health Care

Industrials

Oil & Gas

Technology

Telecommunications

Utilities

Source: Markit, Bloomberg, NORD/LB Fixed Income Research Source: Markit, Bloomberg, NORD/LB Fixed Income Research

iBoxx € Corporates-Distribution Country of Risk iBoxx € Corporates-Maturities per Month

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

DE GB NL ES US FR CH IT SE Other

0

5

10

15

20

25

30

35

1 2 3 4 5 6 7 8 9 10 11 12

2017

2018

2019

2020

2021


iBoxx € Corporate Rating Distribution iBoxx € Corporate Volume Weighting (Sector)

0,4% 0,6% 0,6%

7,4%

10,4%

16,7%

16,6%

21,3%

17,0%

7,6%

1,3%

AAA

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

BB+

0

100

200

300

400

500

600

700




iTraxx Europe – Best Performer (Δ 1M) iTraxx Europe – Worst Performer (Δ 1M)

-28

-14

-14

-13

-11

-11

-11

-10

-10

-10

-30 -25 -20 -15 -10 -5 0

Glencore International AG

Assicurazioni Generali SpA

Aviva PLC

Banco Santander SA

TDC A/S

Aegon NV

Royal Bank of Scotland PLC/The

Volkswagen AG

Mediobanca SpA

Wendel SA

6

7

7

8

8

9

12

18

24

38

0 5 10 15 20 25 30 35 40

Anheuser-Busch InBev SA/NV/old

Centrica PLC

Imperial Brands PLC

Marks & Spencer PLC

British American Tobacco PLC

United Utilities PLC

Pearson PLC

Rolls-Royce PLC

Next PLC

Telefonaktiebolaget LM Ericsson

Source: Bloomberg, NORD/LB Fixed Income Research Source: Bloomberg, NORD/LB Fixed Income Research

iTraxx Xover – Best Performer (Δ 1M) iTraxx Xover – Worst Performer (Δ 1M)

-284

-231

-150

-124

-81

-69

-47

-39

-34

-27

-300 -250 -200 -150 -100 -50 0

Financiere Quick SAS (Sub)

Astaldi SpA

ConvaTec Healthcare E SA

Care UK Health & Social Care PLC (Sub)

Anglo American PLC

Selecta Group BV

Fiat Chrysler Automobiles NV

Wind Acquisition Finance SA

Schaeffler Finance BV

Repsol SA

11

11

19

20

38

39

84

116

145

179

0 25 50 75 100 125 150 175 200

CNH Industrial NV

Peugeot SA

Ladbrokes PLC

UPC Holding BV

Nokia OYJ

Play Finance 1 SA

Stena AB

Garfunkelux Holdco 2 SA

Matalan Finance PLC

Lock Lower Holding AS

Source: Bloomberg, NORD/LB Fixed Income Research Source: Bloomberg, NORD/LB Fixed Income Research



Appendix Contacts

Fixed Income Research

Michael Schulz Head +49 511 361-5309 [email protected]

Kai Niklas Ebeling Covered Bonds +49 511 361-9713 [email protected]

Mario Gruppe Public Issuers +49 511 361-9787 [email protected]

Michaela Hessmert Banks +49 511 361-6915 [email protected]

Melanie Kiene Banks +49 511 361-4108 [email protected]

Jörg Kuypers Corporates / Retail Products +49 511 361-9552 [email protected]

Matthias Melms Covered Bonds +49 511 361-5427 [email protected]

Sascha Remus Corporates / Retail Products +49 511 361-2722 [email protected]

Norman Rudschuck Public Issuers +49 511 361-6627 [email protected]

Thomas Scholz Corporates / Retail Products +49 511 361-4710 [email protected]

Martin Strohmeier Corporates / Retail Products +49 511 361-4712 [email protected]

Kai Witt Corporates / Retail Products +49 511 361-4639 [email protected]

Markets Sales

Carsten Demmler Head +49 511 361-5587 [email protected]

Institutional Sales (+49 511 9818-9440)

Daniel Gutschka (Head) [email protected] Gabriele Schneider [email protected]

Thorsten Bock [email protected] Dirk Scholden [email protected]

Uwe Kollster [email protected] Uwe Tacke [email protected]

Daniel Novotny-Farkas [email protected]

Sales Savings Banks / Regional Banks (+49 511 9818-9400)

Christian Schneider (Head) [email protected] Stefan Krilcic [email protected]

Thorsten Aberle [email protected] Martin Koch [email protected]

Oliver Bickel [email protected] Bernd Lehmann [email protected]

Tobias Bohr [email protected] Jörn Meißner [email protected]

Kai-Ulrich Dörries [email protected] Lutz Schimanski [email protected]

Jan Dröge [email protected] Ralf Schirrling [email protected]

Sascha Goetz [email protected] Brian Zander [email protected]

Sales Asia (+65 64 203136)

Jefferson Ko [email protected] Muhammad Peter Shepherd

[email protected]

Fixed Income / Structured Products Sales Europe (+352 452211-515)

René Rindert (Head) [email protected] Toni Martikainen [email protected]

Morgan Kermel [email protected] Laurence Payet [email protected]

Patricia Lamas [email protected]

Corporate Sales

Schiffe / Flugzeuge +49 511 9818-8150 Firmenkunden +49 511 9818-4003

Immobilien / Strukturierte Finanzierung

+49 511 9818-8150 FX/MM +49 511 9818-4006

Corporate Finance – Origination Corporates

Tobias Müssig (Head) [email protected] Sandro Pittalis [email protected]

Roland Arndt [email protected] Stefan Sigrist [email protected]

Sebastian Dahlhaus [email protected] Sabine Stenschke [email protected]

Birgit Determann [email protected] Karsten Wernecke [email protected]

Christian Müller [email protected]

Financial Markets Trading

Corporates +49 511 9818-9690 Collat. Mgmt / Repos +49 511 9818-9200

Covereds / SSAs +49 511 9818-8040 Cust. Exec. & Trading +49 511 9818-9480

Financials +49 511 9818-9490 Frequent Issuers +49 511 9818-9640

Governments +49 511 9818-9660 Structured Products +49 511 9818-9670

Länder & Regionen +49 511 9818-9550

mailto:[email protected]








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Evaluations of individual financial instruments on the basis of past performance are not necessarily indicative of future results. It should

be noted that the reported figures relate to past years.

Additional information for recipients in Cyprus

This Investment Recommendation constitutes investment research within the meaning of the definition section of the Cyprus Directive

D1444-2007-01(No 426/07). Furthermore, this material is provided for informational and advertising purposes only and does not consti-

tute an invitation or offer to sell or buy or subscribe any investment product.

Additional information for recipients in Denmark

This Investment Recommendation does not constitute a prospectus under Danish securities law and consequently is not required to be

nor has been filed with or approved by the Danish Financial Supervisory Authority as this Investment Recommendation either (i) has not

been prepared in the context of a public offering of securities in Denmark or the admission of securities to trading on a regulated market

within the meaning of the Danish Securities Trading Act or any executive orders issued pursuant thereto, or (ii) has been prepared in the

context of a public offering of securities in Denmark or the admission of securities to trading on a regulated market in reliance on one or

more of the exemptions from the requirement to prepare and publish a prospectus in the Danish Securities Trading Act or any executive

orders issued pursuant thereto.

Additional information for recipients in Greece

The information contained herein describes the view of the author at the time of its publication and it must not be used by its Recipient

unless having first confirmed that it remains accurate and up to date at the time of its use.

Past performance, simulations or forecasts are therefore not a reliable indicator of future results. Mutual funds have no guaranteed

performance and past returns do not guarantee future performance.

Additional information for recipients in Ireland

This Investment Recommendation has not been prepared in accordance with Directive 2003/71/EC, as amended, on prospectuses (the

“Prospectus Directive”) or any measures made under the Prospectus Directive or the laws of any Member State or EEA treaty adherent

state that implement the Prospectus Directive or those measures and therefore may not contain all the information required where a

document is prepared pursuant to the Prospectus Directive or those laws.

Additional information for recipients in Luxembourg

Under no circumstances shall this Investment recommendation constitute an offer to sell, or issue or the solicitation of an offer to buy or

subscribe for Products or Services in Luxembourg.

http://www.dsgv.de/sicherungssystem



Additional information for recipients in Netherlands

The value of your investments may fluctuate. Results achieved in the past do not offer any guarantee for the future (De waarde van uw

belegging kan fluctueren. In het verleden behaalde resultaten bieden geen garantie voor de toekomst).

Additional information for recipients in Poland

This Investment Recommendation does not constitute a recommendation within the meaning of the Regulation of the Polish Minister of

Finance Regarding Information Constituting Recommendations Concerning Financial Instruments or Issuers thereof dated 19 October

2005.

Additional information for recipients in Portugal

This Investment Recommendation is intended only for institutional clients and may not be (i) used by, (ii) copied by any means or (iii)

distributed to any other kind of investor, in particular not to retail clients. This Investment Recommendation does not constitute or form

part of an offer to buy or sell any of the securities covered by the report nor can be understood as a request to buy or sell securities

where that practise may be deemed unlawful. This Investment Recommendation is based on information obtained from sources which

we believe to be reliable, but is not guaranteed as to accuracy or completeness. Unless otherwise stated, all views herein contained are

solely expression of our research and analysis and subject to change without notice.

Additional information for recipients in Sweden

This Investment Recommendation does not constitute or form part of, and should not be construed as a prospectus or offering memo-

randum or an offer or invitation to acquire, sell, subscribe for or otherwise trade in shares, subscription rights or other securities nor shall

it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This Investment Recom-

mendation has not been approved by any regulatory authority. Any offer of securities will only be made pursuant to an applicable pro-

spectus exemption under EC Prospectus Directive, and no offer of securities is being directed to any person or investor in any jurisdic-

tion where such action is wholly or partially subject to legal restrictions or where such action would require additional prospectuses, other

offer documentation, registrations or other actions.

Additional information for recipients in Switzerland

This Investment Recommendation has not been approved by the Federal Banking Commission (merged into the Swiss Financial Market

Supervisory Authority “FINMA” on 1 January 2009).

NORD/LB will comply with the Directives of the Swiss Bankers Association on the Independence of Financial Research, as amended.

This Investment Recommendation does not constitute an issuing prospectus pursuant to article 652a or article 1156 of the Swiss Code

of Obligations. This Investment Recommendation is published solely for the purpose of information on the products mentioned in this

advertisement. The products do not qualify as units of a collective investment scheme pursuant to the Federal Act on Collective Invest-

ment Schemes (CISA) and are therefore not subject to the supervision by the Swiss Financial Market Supervisory Authority (FINMA).

Additional information for recipients in Canada

This Investment Recommendation has been prepared for informational purposes only in relation to the products contained in this materi-

al and is not, under any circumstances to be construed as an offering memorandum or as an offering of any securities for sale directly or

indirectly in any province or territory of Canada.

No securities commission or similar regulatory authority in Canada has passed on the merits of these securities nor has it reviewed this

material and any representation to the contrary is an offence.

Relevant selling restrictions, if any, are contained in the prospectus or other documentation for the respective product.

Additional information for recipients in Estonia

It is advisable to examine all the terms and conditions of the services provided by NORD/LB. If necessary, Recipient of this Investment

Recommendation should consult with an expert.

Additional information for recipients in Finland

The financial products described in this Investment Recommendation may not be offered or sold, directly or indirectly, to any resident of

the Republic of Finland or in the Republic of Finland, except pursuant to applicable Finnish laws and regulations. Specifically, in the case

of shares, those shares may not be offered or sold, directly or indirectly, to the public in the Republic of Finland as defined in the Finnish

Securities Market Act (746/2012, as amended). The value of investments may go up or down. There is no guarantee to get back the

invested amount. Past performance is no guarantee of future results.

Additional information for recipients in Czech Republic

There is no guarantee to get back the invested amount. Past performance is no guarantee of future results. The value of investments

could go up and down

The information contained in this Investment Recommendation is provided on a non-reliance basis and its author does not accept any

responsibility for its content in terms of correctness, accuracy or otherwise.



Arrangements for the confidential treatment of sensitive customer and business data as well as for avoiding and handling conflicts of

interest

NORD/LB has separated its business divisions that may have access to sensitive customer and business data (confidential areas) from

its other divisions (e.g. NORD/LB Research) in terms of functions and locations and/or via relevant data processing arrangements.

The disclosure of confidential information that may have an impact on the prices of securities is monitored by NORD/LB’s Compliance

Unit which is independent of its trading, operational and settlement divisions. This independent unit controls the transactions undertaken

by NORD/LB and its employees on a daily basis to ensure that they are in line with market conditions. The Compliance Unit may impose

such trading bans and restrictions as may be necessary to ensure that information, which may affect the prices of securities, is not mis-

used and to prevent confidential information from being disclosed to divisions that are only allowed to use information available to the

general public. To avoid conflicts of interest in connection with the preparation of financial analyses, the analysts of NORD/LB are

obliged to inform the Compliance Unit of any studies being drawn up and must not invest in the financial instruments handled by them.

They are obliged to notify the Compliance Unit of all transactions (including external transactions) undertaken by them for their own

account or for the account or on behalf of third parties. Thus the Compliance Unit is in a position to identify all unauthorized transactions

undertaken by the analysts, such as insider trading and front and parallel running. When a Investment Recommendation involving con-

flicts of interest to be disclosed within the NORD/LB Group is drawn up, any information on such conflicts of interest will only be made

available by the Compliance Unit upon completion of the Investment Recommendation. Any subsequent amendment of the relevant

Investment Recommendation may only be made upon consultation with the Compliance Unit and when it has been ensured that the

results of the study are not affected by the knowledge of such conflicts of interest. Further information on these matters is set forth in our

Investment Recommendation or Conflict of Interest Policy which is available from the Compliance Unit of NORD/LB upon request.

Time of going to press

1 November 2016 18:00

Disclosure of NORD/LB’s potential conflicts of interest according to § 34b Abs. 1 WpHG and

Article 5 and 6 according to the Commission Delegated Regulation (EU) 2016/958 of 9 March 2016

None.

Additional disclosures

Sources and price indications

Depending on the issuer, we use information from financial data suppliers, our own estimates, company data and the public media for the

preparation of our Investment Recommendations. Unless otherwise stated in the report, prices indicated relate to the closing price on the

previous day. Fees and commissions apply to securities (buy, sell, hold) and these may reduce the yield on investments.

Analytical methods and updates

In the preparation of Investment Recommendations, we take company-specific methods used for fundamental securities’ analysis and

quantitative/statistical methods, as well as technical analytical methods as the basis for valuations and for the regular updates. All as-

sumptions and analytical derivations related to our recommendation may be extracted from the underlying research analysis. It should be

noted that the results of analyses provide a snapshot overview and that past developments do not constitute a reliable indicator for future

profits. The basis of the valuations is subject to unforeseen change at any time, potentially leading to different conclusions. The present

report is prepared on a monthly basis. Recipients are not automatically entitled to receive report update publications. Detailed information

with respect to our rating methodology is available at the webpage www.nordlb-pib.de/Bewertungsverfahren.

Recommendation system Share of recommendation (12 months)

Positive: Positive expectations for the issuer, a security type or a specif-

ic security of an issuer.

Neutral: Neutral expectations for the issuer, a security type or a specif-

ic security of an issuer.

Negative: Negative expectations for the issuer, a security type or a

specific security of an issuer.

Relative value (RV): Relative value recommendation in comparison to

a market segment, an issuer or a maturity.

Positive: 47%

Neutral: 46%

Negative: 7%

Recommendation history (12 months)

An overview of all our bond recommendations during the last 12 months is available at the webpage www.nordlb-pib.de/empfehlungsuebersicht_renten. Corresponding password: "renten/Liste3".

Issuer / security Date Recommendation Bond type Cause

Distribution: 04.11.2016 12:06

https://www.nordlb-pib.de/Bewertungsverfahren

https://www.nordlb-pib.de/empfehlungsuebersicht_renten

https://www.nordlb-pib.de/empfehlungsuebersicht_renten

Documents

Fixed Income Research Corporate Bond Strategy · 11/4/2016 · Corporate Bond Strategy November 2016 11/2016 No. 3. ... or the referendum on the constitution in Italy on 4 December