MaritSolblad-40

Monthly report August 2021 - HYOF

The Nordic HY market developed well during August with demand-driven spread in the SEK and NOK markets.

The EUR and USD markets have been more neutral but USD HY has performed better in the last week in line with better stock market developments. The SEK and NOK markets suffer from a shortage of materials in the primary market as only a few issues have been made so far (Walenius Wilhemsen (NOK), Trym AS (NOK), 24Storage (SEK), Dooba Finance (SEK), Ilja Batljan Invest (SEK), Genova Property (SEK), Axactor (EUR), DNO (USD).

Many investment funds have had inflows during the summer and need to use their cash, which has made them look for bonds to invest from the secondary market, which drives the spreads in SEK and NOK together.

Several banks say that there is a good pipeline for new issues of HY bonds in the future and that the market will easily swallow given the good sentiment in the market. The lack of alternative investments means that those who think that the spreads have merged too much buy in any case.

Attaches a graph of how Dentalums (yield) and SIBS (spread over stibor) issue in SEK have developed during the year. Completely driven by a lack of materials and if it is also non-Real Estate, it is very difficult to find materials. If you also season with a green framework, the demand will be hysterical.

High Yield
Source: Bloomberg
High yield spread
Source: Bloomberg

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Emma Westerberg

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