Weekly Highlights - UniCredit Research
Transcription
Weekly Highlights - UniCredit Research
Credit Research 11 December 2015 High Yield Pacenotes Weekly Highlights ■ ■ ■ ■ Credit spreads in high-yield (iBoxx HY NFI +20bp to 449bp) ultimately gave in to the ongoing weakening trend in equities (Euro STOXX 50 -3.4% wow) amid investors experiencing further volatility in commodities prices (the price of Brent futures broke below USD 40/bbl). Investor cautiousness has increased before next week’s FOMC meeting (where a rate hike is broad market consensus), as Chinese trade data showed falling exports (-6.8% yoy in November) for a fifth consecutive month and declining imports (-8.7% yoy in November) for the thirteenth consecutive month. While commodity prices were in focus, eurozone data came in mixed. German IP (+0.2% mom) in October missed consensus expectations. Following two consecutive declines and overall decreasing industrial activity in the third quarter, our economists highlight that the positive figure still shows the first sign of recovery in the industrial sector. In addition, the headline figure was depressed by a sizable drop in energy production in October while manufacturing activity expanded by 0.7% mom. Hence, our economists expect a solid end-of-year acceleration in economic growth as new orders and survey indicators have been upbeat lately. The positive stance towards the periphery was underlined by Italy’s IP advancing for a second consecutive month in October (+0.5% mom after 0.2% and vs. consensus of 0.3%). Our economists highlight that manufacturing activity performed even better (+0.8% mom) with energy production (-0.7% mom) also softening the increase in the headline figure. On a yearly basis, IP was up by a solid 2.9% (after 1.8%), suggesting an annual expansion of 1.1% in the period January-October 2015. Contents Renewed price declines bring oil back in the focus __ 2 Rating Actions ______________________________ 4 Recommendation Overview ____________________ 5 HY Calendar________________________________ 5 Earnings Preview ____________________________ 6 Phoenix __________________________________ 6 Latest Company News ________________________ 7 Areva (Hold) ______________________________ 7 Bilfinger (Sell) _____________________________ 7 Cirsa (Buy) _______________________________ 8 FCA (Buy) ________________________________ 8 FTE Automotive (Hold) ______________________ 9 Faurecia (Buy) ___________________________ 10 Goodyear (Hold) __________________________ 10 Matterhorn Telecom (Sell) __________________ 11 Oi (Hold) ________________________________ 11 RCS & RDS (Hold) ________________________ 12 TUI (Hold) _______________________________ 13 TeamSystem (Hold) _______________________ 14 Voith (Hold) ______________________________ 15 HY Issuers and Bonds _______________________ 16 FINANCIALS WEEKLY WINNERS AND LOSERS CMZB 2.884% 03/30/18 DEXGRP 0.604% 07/10/17 NOVBNC 4% 01/21/19 CMZB 5% 10/30/17 SABSM 6.25% 04/26/20 NOVBNC 4.75% 01/15/18 NOVBNC 3.5% 01/02/43 NDB 4.75% 10/02/23 AIB 1.375% 03/16/20 DB 8% 05/15/18 iBoxx EUR HY Financials MONTE 7.44% 12/30/16 VENBAN 4% 05/20/19 PMIIM 7.125% 03/01/21 BPIM 6% 11/05/20 MONTE 5% 04/21/20 MONTE 5.6% 09/09/20 VICEN 5% 10/25/18 BPIM 6.375% 05/31/21 MONTE 0.891% 11/30/17 VICEN 9.5% 09/29/25 -8% -6% -2% -4% weekly total return 0% 2% Source: Markit, UniCredit Research While the fundamental recovery trend remains solid, uncertainties outside Europe will likely flare up again, especially as the renewed weakness in oil prices put concerns about rising US default rates back into investor focus. NON-FINANCIALS WEEKLY WINNERS AND LOSERS HEMABV 8.5% 12/15/19 EDCON 9.5% 03/01/18 STTESE 11% 08/15/17 CGGFP 5.875% 05/15/20 HEMABV 5.134% 06/15/19 SNSPW 4% 09/30/21 HEMABV 6.25% 06/15/19 EDCON 9.5% 03/01/18 JAH 3.75% 10/01/21 CEMEX 4.375% 03/05/23 iBoxx EUR HY Non-Financials PETBRA 3.75% 01/14/21 OIBRBZ 4.375% 03/24/17 OIBRBZ 5.125% 12/15/17 QUIBB 7.451% 10/15/19 OIBRBZ 5.625% 06/22/21 OIBRBZ 5.875% 04/17/18 OIBRBZ 5% 11/04/19 NSINO 8% 02/24/21 OIBRBZ 4.5% 06/16/25 NWRLN 8% 04/07/20 -35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% weekly total return 0.0% 5.0% 10.0% 15.0% Bloomberg UCCR Source: Markit, UniCredit Research UniCredit Research Author Dr. Christian Weber, CFA (UniCredit Bank) +49 89 378-12250 [email protected] page 1 Internet www.research.unicredit.eu See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Renewed price declines bring oil back in the focus -2.0% 400 Corporates Industrials -2.5% -3.0% 300 04-Dec 27-Nov 20-Nov 13-Nov 06-Nov 30-Oct 23-Oct 16-Oct 09-Oct 02-Oct 25-Sep 18-Sep 11-Sep -3.5% 200 ■ Average ASW ▬ Current ASW Oil & Gas -1.5% Health Care 500 -1.0% Technology 600 0.0% -0.5% Financials 0.5% Consumer Goods 700 1.0% Basic Materials 1.5% 800 Consumer Services excess Media cumulated Utilities 2.0% Bund Telecommunications iBoxx HY NFI 12M ASW spread ranges by sector iBoxx EUR HY main cum xover Non-Financials iBoxx HY Excess Return vs. Bund █ Minimum-Maximum Range Source: Markit, UniCredit Research Oil prices mark fresh low with Brent futures breaking below USD 40/bbl The renewed weakness in oil prices (Brent futures slipped below USD 40/bbl) follows the abandoned production target at the OPEC meeting on 4 December, which prompted our commodity colleagues to lower their oil-price forecast for 2016 to an average of USD 52.5/bbl from their previous forecast of USD 60/bbl, and for 2017 down to USD 60/bbl from USD 65/bbl. One of the reasons for effectively abandoning a production target is the difficulty in dealing with Iranian production returning to the market after the possible lifting of sanctions. After sanctions were imposed, oil production in Iran dropped form 3.6mn bbl/day to 2.8mn bbl/day. Iran aims to increase production back to previous levels, but due to its rather old oil infrastructure, our commodity analyst estimates that an increase of merely 500-600k bbl/day is possible over a six-month period. Iran is already working on some future projects and also has about 40-50mn bbl in floating storage available for export, which could considerably increase the supply surplus in 2016 should Iran return to the oil market before high-cost producers are forced to reduce their supply. Supply-and-demand dynamics should push prices higher in 2016 Nevertheless, our commodity analyst sticks to the baseline scenario of an oil-price recovery in 2016, or 2017 at the latest, as the decline in US fracking production is only a matter of time and could become more severe than generally expected. While most analysts expect a further decline of 500,000 bbl/day in 2016 production after a 450,000 bbl/day decline in 2015, there is no historical data on fracking fields. In addition, the lack of accessibility to financial markets should lead to a decline in investment in new oil projects, which will accelerate decline rates in exhausted fields. This factor could be strong enough to offset a possible increase in Iranian oil production next year. Moreover, global oil demand will likely increase by 1.2mn bbl/day in 2016, after having seen a strong increase in consumption of 1.8mn bbl/day in 2015. This will lead to a supply deficit in the second half of 2016 and a turn in the global inventory cycle. Risk reward ratio tilted to the positive side in Oil & Gas and Basic Resources Hence, we also remain constructive on Oil & Gas and Basic Resources from a credit perspective. While the bottoming-out phase in respective oil and commodities prices will continue to spark volatility from time to time, the medium-term fundamental supply-anddemand dynamics suggest that the risk-reward ratio is skewed to the positive side, given current elevated risk premiums in both sectors. Please also note that our sector analyst also remains positive about Glencore (Baa2n/BBBn/--). Although the company is rated IG, its notes trade at B spread levels and we reiterate our overweight recommendation following a reassuring investor update call this week. While Glencore is feeling the further-weakened commodity pricing environment, its management continues to reply with a confident message of further accelerated debt reduction, continued cost cuts to preserve FCF generation (excluding disposals) and (most importantly) additional flexibility if commodity prices continue to decline even further. UniCredit Research page 2 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes INDEX PERFORMANCE XOver vs. Cash Index Spread Index Performance iBoxx EUR High Yield main cum crossover LC Spread (RS) iTraxx Eur Xover 600 150 Weekly cumulated 2.0% 1.5% 1.0% 450 100 0.5% 0.0% -0.5% 300 50 -1.0% -1.5% -2.0% 04-Dec 27-Nov 20-Nov 13-Nov 06-Nov 30-Oct 23-Oct 16-Oct 09-Oct 02-Oct 25-Sep 11-Sep 18-Sep -2.5% Dec-15 Nov-15 Oct-15 Sep-15 Aug-15 Jul-15 Jun-15 May-15 Apr-15 Feb-15 Jan-15 Mar-15 0 Dec-14 150 Source: Markit, UniCredit Research PERFORMANCE & SPREAD BY RATING 3M cumulated performance by BB/B/CCC 3M daily spread movement by BB/B/CCC B BB CCC iBoxx EUR High Yield main Non-Financials cum crossover LC BB 4.0% iBoxx EUR High Yield main Non-Financials cum crossover LC B iBoxx EUR High Yield main Non-Financials cum crossover LC CCC 3.0% 1200 2.0% 1000 08-Dec 01-Dec 24-Nov 17-Nov 10-Nov 03-Nov 27-Oct 20-Oct 08-Sep 04-Dec 27-Nov 20-Nov 13-Nov 06-Nov 30-Oct 23-Oct 16-Oct 02-Oct 09-Oct 0 25-Sep -4.0% 18-Sep 200 11-Sep -3.0% 13-Oct 400 06-Oct -2.0% 600 29-Sep -1.0% 800 22-Sep 0.0% 15-Sep ASW-Spread (bp) 1.0% Source: Markit, UniCredit Research RATING ISSUANCE & RATING STRUCTURE Issuance by Rating BB 12,000 Rating Structure B CCC CC average rating (RS) -0.5 BB 0 1.5 6,000 B2 60% 50% 2.5 2,000 3 CCC 3.5 30% 4 10% Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 C 70% 4,000 0 CC 80% iBoxx HY Weight Issues (EUR mn) 0.5 1 BB CCC 90% 10,000 8,000 B 100% 40% 20% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Markit, UniCredit Research UniCredit Research page 3 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes DEFAULT RATES AND SECTOR STRUCTURE Spread vs. Default Rate Sector Structure Global Trailing 12-Month Issuer-Weighted Spec-Grade Default Rate 16% 14% 1,600 Global Baseline Forecast iBoxx EUR High Yield main ASW (RS) FNL 90% 12% 1,200 80% 10% 1,000 800 6% 600 4% 400 iBoxx HY Weight 1,400 8% CGD IDU TEL BSC OIG CSV CNS THE HCA UTI MDI 100% 70% 60% 50% 40% 30% 20% 2% 200 0% 2008 0 2009 2010 2011 2012 2013 2014 2015 2016 10% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Markit, UniCredit Research Rating Actions Rating Date 10-Dec-15 Issuer Agency action Rating Type From To Edcon Proprietary Moody's upgrade Senior Unsecured Debt Ca Caa3 outlook Outlook NEG STABLE upgrade Probability of Default Ca Caa1 S&P outlook Outlook STABLE NEG Moody's downgrade Senior Unsecured Debt Ba2 Ba3 *- downgrade Corp Family Rating Ba2 Ba3 *- downgrade Corp Family Rating B3 Caa2 downgrade Senior Secured Debt Rating B3 Caa2 Outlook NEG NEG Probability of Default B3 Caa2 Snai 9-Dec-15 Petrobras Waste Italia Moody's outlook downgrade 8-Dec-15 Darty S&P outlook Outlook NEG DEVELOP ODEON & UCI Cinemas Moody's outlook Outlook NEG STABLE Sberbank Moody's outlook Outlook NEG STABLE Fitch outlook Outlook STABLE POS Moody's outlook Outlook POS STABLE S&P outlook Outlook STABLE NEG Fitch watch negative Senior Unsecured Debt BB- BB- *- Outlook STABLE NEG Moody's downgrade Senior Unsecured Debt Ba3 B3 UBS 7-Dec-15 4-Dec-15 CMA CGM Chesapeake Energy outlook initial outlook downgrade Senior Secured Debt Rating B1 Outlook NEG NEG Probability of Default Ba2 B2 Gazprom Moody's outlook Outlook NEG STABLE Gazprom Neft Moody's outlook Outlook NEG STABLE Source: UniCredit Research UniCredit Research page 4 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Recommendation Overview Buy Hold Hold Sell ALBA Group Altice Amplifon Cirsa CMC di Ravenna Faurecia FCA Grupo Antolin IGT Ineos Italcementi Motherson Novomatic Numericable-SFR Prada Renault Sappi Schaeffler Virgin Media Wind ZF Friedrichshafen Alain Afflelou Alcatel Bormioli Rocco Buzzi Unicem CABB Cerved Douglas Europcar FMC Fresenius FTE Automotive Gamenet Gestamp Goodyear Guala Closures Haniel HeidelbergCement Hornbach HP Pelzer ista Jaguar Land Rover Kerling Kion LafargeHolcim Lecta Lufthansa Mahle Manutencoop Nokia Oi Ontex OTE Hellenic Telecom Peugeot Phoenix RCS & RDS Rhiag Schmolz & Bickenbach Smurfit Kappa STADA Stora Enso Sunrise TeamSystem Techem Telecom Italia Telenet Thomas Cook TMF Group TUI United Group Unitymedia UPC Vestas Wienerberger Xella Ziggo Zobele Ardagh Glass Bombardier CNH Industrial Hertz Matterhorn Mobile Piaggio Snai Source: UniCredit Research HY Calendar Mon, 14 Dec Tue, 15 Dec Wed, 16 Dec Thu, 17 Dec -- Numericable-SFR: Annual Shareholder Meeting at 14:30 CET -- Phoenix Pharmahandel: -3Q15/16 results and conference call at 14:00 CET Dial-in: +49 - (0)69-271340154 Telecom Italia: Extraordinary Shareholder Meeting Fri, 18 Dec Source: UniCredit Research UniCredit Research page 5 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Earnings Preview Phoenix Thursday, 17 December Phoenix (--/BB+/BBs) will report 3Q15/16 and 9M15/16 results on 17 December and hold a conference call at 14:00 CET the same day. We expect a continuation of the solid 1H15/16 trend. We assume an increase in reported revenue of 5% yoy in 9M15/16 to EUR 17,564mn (2Q15/16 on a reported basis: +3.3% yoy; 1Q15/16: +7% yoy). We assume that the improvement will occur mainly as a result of the increase in revenue in the German wholesale market. Also the majority of the company’s foreign markets should record an increase in revenue. We expect Phoenix to exceed European pharma market growth of around 4% by around 2% in 9M15/16 (1H15/16: + 6.7% in total operating performance). In 9M15/16, group EBITDA (reported) should remain nearly stable yoy at EUR 335mn. Note, in 2Q15/16 group EBITDA decreased by 12.7% yoy to EUR 112.3mn. Management indicated during the 1H15/16 results call that without exceptional items, EBITDA increased by around EUR 15mn yoy in 2Q15/16. We expect an increase in gross profit margin to 9.6% from 9.3% in 9M14/15 (1H15/16: 9.6%), mainly supported by an improved cost-of-sales ratio. We assume a further slight improvement in net leverage in 9M15/16. In 1H15/16, the net debt/adj. EBITDA ratio (company definition) improved yoy to 2.54x (1Q15/16: 2.71x; FYE 2014/15: 1.88x). For 1H15/16 we calculate an improvement in credit metrics yoy, i.e. adj. net debt/EBITDA of 2.8x (FY14/15: 2.5x; 1H14/15: 4.4x, all UniCredit calculations including pension liabilities and operating leases). We assume that management will confirm its FY15/16 target of profit before tax above the prior-year level (adjusted for special effects from pensions) and a slight increase in the equity ratio. Dr. Silke Stegemann (UniCredit Bank) +49 89 378-18202 [email protected] UniCredit Research page 6 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Latest Company News Areva (Hold) Tuesday, 8 December Yesterday Bloomberg reported that Areva (--/BB-/--) is considering the disposal of Areva TA, a unit making nuclear engines for French military submarines. According to the article, Areva may approach DCNS, the French state-controlled maker of military vessels and submarines, as well as EDF (A1n/A+n/As) or Technicatome, about their interest in buying the unit. The deliberations are said to be at an early stage and a transaction may still not materialize. Currently, both DCNS and EDF have minority stakes in Areva TA. For FY14 Areva TA, which also makes nuclear reactors for research, generated revenues of EUR 345mn and EBITDA of EUR 22mn. A sale of the unit would help to close the remaining refinancing gap in its 20152017 financing plan. According to Areva’s financing plan, the company wants to cover EUR 7bn refinancing needs by 1. several equity financing sources, i.e. through cash pooling and improved working capital generation (EUR 1.2bn), 2. at least a 75% sale of Areva NP for roughly EUR 2.0bn, 3. a significant capital increase by the French state (Aaas/AAn/AAs) in the area of EUR 3bn and 4. the sale of other non-strategic assets for around EUR 400mn. One major obstacle to the sale of Areva NP remains Areva’s Finnish EPR reactor Olkiluoto 3, for which EDF continues to refuse to take liability. Nevertheless, given strong political involvement, we still expect a firm offer from EDF in the coming weeks. Given that the considerations of a sale of Areva TA seem to be in an early stage and the small size of the business, we regard the news as credit neutral. In the short term, we do not expect an improvement in Areva’s credit profile, but take some comfort from Areva’s latest results and the recent headlines about possible cooperation with China National Nuclear Corporation (CNNC). Main credit drivers in the short-to-medium term will be 1. the final price that is agreed with EDF for buying Areva NP, 2. the size of the equity contribution from its majority shareholder, France, (before year-end) and 3. the final outcome of the Flamanville vessel inspection (mid-2016). We take comfort from the strong commitment from the French state, which also includes its involvement in the ongoing negotiations in the Areva NP sale with EDF. Therefore, we keep our hold recommendation on the name. We regard the CEIFP 4.375% 11/19 as the most attractive bond on the Areva curve, offered at around 225bp in Zspread terms. Michael Gerstner (UniCredit Bank) +49 89 378-15449 [email protected] Bilfinger (Sell) Wednesday, 9 December UniCredit Research Bloomberg reports that Bilfinger (--/BB+n/--) will be seeking bids for its Power division already in January in an effort to divest the business by the end of 1H15. The company is looking for EUR 200-300mn for the business, according to unidentified sources. The Power division is expected to have output of around EUR 1.2bn in 2015 with an EBITA loss of around EUR 100mn (EUR 8mn in 2014). This would be basically in line with the net proceeds of around EUR 220mn that the company received for its Construction business at the end of 2014 (2014 output: EUR 600mn, EBITA about EUR -39mn). The article says that Bilfinger is reaching out to companies and private-equity bidders. At this point, we think that it is far from guaranteed that Bilfinger will be able to sell the division by its target date or that it will be able to achieve the amount that it is seeking. S&P has said that if Bilfinger does not manage to sell the division by the end of 1H15, it will consider lowering its rating further. Moreover, Bilfinger has not specified how it would use the proceeds, but we assume that a major part would be used for expanding into new product segments or geographies rather than for deleveraging, as the company’s EBITA has shrunk considerably in the last few years and its business profile has become less diversified. The company is guiding for 2015 EBITA of EUR 150-170mn in continuing operations (2014: EUR 198mn, adjusted EUR 270mn; 2013: EUR 349mn, adjusted page 7 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes EUR 415mn). This compares to gross debt of EUR 561mn as of 3Q15. Considering these risks and uncertainties, we think that the GBFGR 2.375% 12/19 is trading quite tight at a midyield of 2.2% and we therefore reiterate our sell recommendation. Jonathan Schroer, CFA (UniCredit Bank) +49 89 378-13212 [email protected] Cirsa (Buy) Thursday, 10 December This morning, Cirsa (B2p/B+s/--) announced the acquisition of two casinos in Morocco: 1. A 82% stake in one casino in Agadir, Morocco, a resort town on Morocco’s South Atlantic coast. The casino operates 191 slot machines and 21 tables. The total cash consideration for the casino was EUR 22mn, which represents an EBITDA multiple of 5x. 2. A 51% stake in a second casino in Agadir, which operates 95 slot machines and 10 tables. The second acquisition is expected to be closed in January 2016 for a total cash consideration of EUR 3mn. The minority interests in the two acquired casinos will continue to be held by local partners. Cirsa highlighted that the acquisitions will be funded with available cash. In our view, the acquisitions are part of the company’s strategy to consider selective acquisitions in geographic markets. However, Morocco was a surprise for us, as Cirsa is mainly active in countries such as Spain, Latin America and Italy. All in all, we keep our buy recommendation following management’s encouraging 2016 outlook and still see some upside for the 2023 bond, which has recovered significantly since September. We note that Cirsa is one of the fastest-growing high-yield gaming companies in our coverage (compared to Gamenet, Snai and IGT) and has only limited exposure to adverse Italian regulation (4.6% of its 9M15 EBITDA). However, we note the company’s exposure to FX devaluation risk in Latin America (25.6% of EBITDA generated in Argentina, 14.1% in Colombia and 6.2% in Mexico). Mehmet Dere (UniCredit Bank) +49 89 378 11294 [email protected] Dr. Silke Stegemann (UniCredit Bank) +49 89 378-18202 [email protected] FCA (Buy) Monday, 7 December UniCredit Research In a presentation dated 4 December in London, FCA (B1p/BB-p/BB-s) provided an update on its 2018 business plan from May 2014. FCA said that there would be no significant changes to its key initiatives, but the following changes impact the plan: regional industry performance, shifts in brand performance, cadence of product launches, capital market transactions, Ferrari separation and FX environment. FCA now expects its net industrial debt to be more than EUR 3bn lower than in its original business plan for FY15-18. The company now targets net debt of EUR 6.6-7.1bn (FY15) and net cash of >2.0bn (FY18). Major reasons for this are the USD 2.875bn 7.875% 12/16 mandatory convertible bonds, FCA treasury shares and cash exit rights, the Ferrari IPO and spin-off, and the expected reduction of positive FCF from the Ferrari spin-off. The Ferrari demerger and spin-off of its 80%-stake to FCA holders of shares and mandatory convertible securities were recently approved by FCA’s EGM, and are expected to be carried out in early January 2016. Ferrari recently signed a EUR 2.5bn syndicated credit facility comprising a bridge and term loan of EUR 2bn and an RCF of EUR 500mn, with the proceeds of the Bridge and Term loan to be used to refinance debt owing to FCA and others. In 4Q15, FCA received EUR 0.9bn in IPO proceeds and the Ferrari spin-off will reduce net industrial debt by another EUR 0.7bn in 1Q16. Regarding liquidity, FCA repeated its goal to reduce its liquidity to EUR 15-20bn (vs. EUR 22bn at FYE15) after the removal of FCA US ring-fencing in 1H16. FCA previously planned its capex peak for 2016 at around EUR 11bn, but now plans the capex peak for 2017 to support the heavy cadence of new/refreshed product programs, but still aims to reduce capex to EUR 8.5-9.5bn in 2018. According to Automotive News Europe, CEO Sergio Marchionne said that FCA does not plan page 8 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes a hostile bid for GM (Ba1s/BBB-s/BBB-s) at the moment and will focus on executing its growth plan to 2018 until the right and willing partner is found. The CEO said that FCA would present an updated product plan in January due to changes in the market, such as a slowing growth in China, which could include some Alfa Romeo and Maserati product launches being delayed and the target for Jeep SUVs in NAFTA being raised (2mn units in 2018, instead of the previously planned 1.87mn). FCA’s FY15 guidance (excl. the Ferrari spin-off in January 2016, but to reflect the Ferrari IPO proceeds of USD 982.4mn in 4Q15) is as follows: worldwide shipments of around 4.8mn (+4.3% yoy vs. FY14: 4.6mn units); revenue yoy of more than EUR 110bn (+14.5% yoy from FY14: EUR 96.1bn); adjusted EBIT (excl. unusual items) of over EUR 4.5bn (FY14: EUR 3.6bn); adjusted net income of around EUR 1.2bn (FY14: EUR 0.6bn); and net industrial debt of EUR 6.6-7.1bn (3Q15: EUR 7.8bn; FY14: EUR 7.7bn). FCA will not pay a dividend in FY15. FCA recently said that there are no immediate plans to dispose of Magneti Marelli. For details on the credit profile and credit outlook, please refer to our Euro High Yield & Crossovers publication of 18 September, from page 216. We keep our buy recommendation on FCAIM bonds. Please refer to our latest comment for our rationale. From a one-month perspective, the most attractive bonds are the FCAIM 10/19 (EUR) and the 6/17 (EUR) bonds. The least attractive are the 7/18 (EUR) and 7/22 (EUR) bonds. Dr. Sven Kreitmair, CFA (UniCredit Bank) +49 89 378-13246 [email protected] FTE Automotive (Hold) Monday, 7 December FTE Automotive (B2s/Bs) held a conference call on its 3Q numbers. The company said that its DCT sales in 9M15 represented 5% of group revenues or EUR 19mn (compared to 1H15: 1% or EUR 1.3mn). FTE said that it expects the non-linear growth of its DCT business to continue into FY15/16. The company said that it repaid EUR 5mn of its EUR 15mn RCF drawing in November and expects to fully pay back the remaining drawdown of EUR 10mn over time. In addition, FTE presented some new applications and products in electric shift technology and electric pump technology (metal-to-plastic-substitution), where it already has orders, but which are not yet in serial production and would later lead to revenues. FTE said that it could not comment regarding the potential exit of its sponsors, and that there is no decision yet regarding the call of its bond. Regarding its VW exposure, it has seen no impact on its business. For our comment on 3Q15 numbers, please refer to our HY Daily dated 30 November. In 3Q15, FTE’s adjusted gross (net) leverage (UniCredit Research) was 4.7x (4.4x) vs. 5.2x (4.9x) qoq and 5.3x (4.9x) yoy. For details on FTE’s credit profile and on our model, please refer to our Euro High Yield & Crossovers publication of 18 September, from page 239. We keep our hold recommendation on the FTEAU 20 bond, which trades at a price of 106.5/108 (YTW of 5.3%/3.0%) given the bond’s call structure. We note that, at the end of October, Reuters reported – citing two people familiar with the matter – that Bain Capital is preparing to sell or float FTE Automotive to take advantage of high sector valuations. After receiving expressions of interest from Asian groups, Bain asked Rothschild to sound out options for FTE, including a sale or IPO, which could take place as early as mid-2016, the sources said. Prior to its first call date on 15 July 2016 at 104.5, the FTEAU 20 bond has a 40% IPO claw-back at 109 and a make-whole call at 50bp. The documentation also contains a change-of-control put at 101. In the absence of an exit, a potential scenario for a bond call could be the issuance of a new bond or bank loan to refinance the bond call plus the RCF drawings and, depending on the leverage development and the macro picture, perhaps another repayment of the shareholder loan. Dr. Sven Kreitmair, CFA (UniCredit Bank) +49 89 378-13246 [email protected] UniCredit Research page 9 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Faurecia (Buy) Monday, 7 December Today, Faurecia (Ba3s/--/BB-s) launched the early redemption of its 2018 3.25% EUR 250mn OCEANE bonds, which are convertible into and/or exchangeable for new or existing shares. This early redemption will be effective 16 January, please find the technical details on Faurecia’s website. Thanks to the evolution of the Faurecia share price, which is significantly higher than the bond redemption price, this early redemption should lead to the conversion of most of the bonds issued into shares. By the end of November 2015, 4.35mn bonds (of a total of 12.83mn issued) had already been converted into shares, signaling investor confidence. The company stated that the early redemption should enable Faurecia to reduce its debt by around EUR 250mn. Combined with other debt-management operations already carried out, Faurecia confirmed its target to reduce its financial expenses by nearly EUR 50mn in 2015 and by another EUR 50mn in 2016. Please refer to our comment on 3Q15 revenues in our HY Daily on 15 October. Despite its comparatively longer modified duration, we continue to have a buy recommendation on the EOFP 6/22 bond, which trades below par, around 3.3% in yield and with a Z-spread of 277bp. The EOFP 6/22 also trades quite close to Peugeot’s 5Y CDS curve. In the absence of larger M&A, we expect a rating upgrade of Faurecia by one notch to mid-BB as a result of the achievement of 2015 and 2016 guidance, together with the debt reduction from the conversion of its 1/18 EUR 250mn OCEANE (convertible bond) in January 2016. Such a rating upgrade is not priced into the current yield level of the EOFP 6/22 bond. The prerequisite for a rating upgrade is, however, a continued positive growth rate in global automotive production. We expect Faurecia to refinance its 9.375% EUR 490mn bond maturing December 2016 via the bond market. For details on Faurecia’s credit profile and our model, please refer to our Euro High Yield & Crossovers publication (18 September; from page 228). Dr. Sven Kreitmair, CFA (UniCredit Bank) +49 89 378-13246 [email protected] Goodyear (Hold) Tuesday, 8 December UniCredit Research Goodyear (Ba2s/BBs/BB-s) announced that its slightly-better-rated European subsidiary, Goodyear Dunlop Tires Europe B.V. (GDTE; Ba1s/BBs/BBs), will commence a private offering of EUR 250mn senior notes due 2023. The notes will be senior unsecured obligations of GDTE and will be guaranteed on a senior unsecured basis by Goodyear and certain of its wholly-owned US and Canadian subsidiaries that also guarantee Goodyear’s obligations under certain of its senior secured credit facilities and senior unsecured notes. The issuance and sale of the notes are subject to market and other customary closing conditions. GDTE intends to use the net proceeds from this offering, together with its current cash and cash equivalents, to redeem in full the EUR 250mn aggregate principal amount of its 6.75% 4/19 senior notes (Ba1/BB/BB). The GT 6.75% 4/19 bond has been callable since 4 April 2015 at 103.375 and the call price will decline to 101.688 from 14 April 2016. On 2 November, GT issued USD 1bn in 5.125% 11/23 notes with a slightly weaker bond rating (Ba3/BB/BB-) and redeemed USD 1bn 8.25% 2020 senior notes on 7 December. With its 3Q15 results, GT affirmed its 2015-16 financial targets: SOI growth of between 10-15% p.a., annual positive FCF from operations and adjusted debt/EBITDAP of 2-2.1x at FYE 2016. The key SOI drivers in 2015 will be global volume growth of 1-2%, price/mix vs. raw materials of USD 370mn (previous: USD 330mn), cost savings vs. inflation of USD 0mn (previous: USD 70mn), FX of USD 160mn (previous: USD 200mn), the Amiens closure worth USD 20mn and other tirerelated of USD 20mn (previous: USD 0mn). We calculate improved gross debt/EBITDA (adj.) of 3.4x in LTM9M15 vs. 3.5x qoq. The company’s most important recovery driver has been its segment North American Tire, which, in 9M15, accounted for 54% of GT’s group EBIT. In FY11-14, the company was able to reduce its adjusted gross leverage from around 6-7x in FY08/09 by improving its EBITDA, generating FCF before pension funding of between USD 600-900mn p.a. and injecting significant amounts of capital into pension funding. page 10 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Subsequently, there has been a series of rating upgrades over the past few years. Moody’s hurdle ratios for an upgrade are EBITA/interest ≥4.0x (3Q15: 2.85x) and debt/EBITDA of 2.0x (3Q15: 3.1x). At S&P, an upgrade is possible if FOCF/adjusted debt is ≥15% (1H15: 13.5%) and if GT maintains debt/EBITDA of <2x (1H15: 2.78x) on a sustained basis. Goodyear will report FY15 results on 16 February 2016 and we would expect some improvement of credit metrics, given that GT usually generates most FCF seasonally in its 4Q results. Nevertheless, this might not be enough to justify rating upgrades as soon as with FY15 results. On the credit-positive side, GT’s 2014-16 capital allocation plan is for USD 800-900mn of debt repayments and pension funding, which is aimed at further strengthening its leverage metrics and advancing its objective of achieving an investment grade credit rating. We keep our hold recommendation for the euro-denominated GT 6.75% 4/19 (Ba1/BB/BB; EUR 250mn), which offers no price upside potential given that it was already priced to call. Given the likelihood of further rating upgrades in 2016 (if continuously supported by stable North American and European tire market environment, the low oil price and the planned debt repayments), we could, however, see the new bond as more attractive depending on its yield. The USDdenominated bonds GT 7/22 (Ba3/BB/BB-) trade at a yield of 3.6% and the GT 11/23 (Ba3/BB/BB-) at a yield of 4.5%. We note that another bond, the GT 6.5% 3/21 (USD 1bn), will also be callable from 1 March 2016 @ 104.875, (minimum 30 days call notice). Dr. Sven Kreitmair, CFA (UniCredit Bank) +49 89 378-13246 [email protected] Matterhorn Telecom (Sell) Tuesday, 8 December Yesterday, Salt (Matterhorn Telecom) announced that CEO Johan Andsjö has decided to leave Salt with immediate effect. Pierre-Alain Allemand (former executive VP of SFR) will act as interim CEO while a successor for Johann Andsjö is sought. Since the recent ownership change at Salt, Pierre-Alain Allemand has been working at Salt assisting the executive team drive transformation initiatives with operational and economic efficiencies. We note that in May, CTO Johann Hall, and in mid-June, Matthias Hilpert (Chief Commercial Officer), Tonio Meier (Chief Customer Operations Officer) and CFO Yann Leca left the company. These four positions have since been filled. Given the company’s operating weakness and lack of transparency, the surprising move by Salt’s CEO adds further uncertainty/risk to an investment in this company’s bonds. Salt’s press release stated that it was Johan Andsjö’s decision to leave the company, with no further explanation. Also, the press release contained no expression of gratitude for his service since 1 October 2012 for Orange CH/Salt CH. Hence, we assume that Johan Andsjö’s move was driven by opposing opinions about Salt’s direction going forward. We have a sell recommendation for MATTER bonds. Stephan Haber, CFA (UniCredit Bank) +49 89 378-15192 [email protected] Oi (Hold) Thursday, 10 December UniCredit Research Yesterday, Moody’s placed its Baa3 rating on Brazil (Baa3cwn/BB+n/BBB-n) on review for downgrade. This review for downgrade is driven by the following: 1. rapidly and materially deteriorating macroeconomic and fiscal trends, and a diminished likelihood of trend reversal in the next 2-3 years; 2. worsening governability conditions and an increased risk of policy paralysis. Moody’s stated that fiscal and economic activity indicators continue to sharply deteriorate with no clear indications as to when they will bottom out. Although the telecoms business is supposed to be non-cyclical, or rather less cyclical, a deteriorating macroeconomic environment is clearly negative for Oi’s (Ba3n/BB+n/BBn) operating development and its target to become FCF positive over time. Moreover, such a macro-economic outlook page 11 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes reduces the valuation for Oi and thereby perhaps also the probability of support from LetterOne. In addition, yesterday, Tim Paticipacoes’ CEO, Rodrigo Abreu, was quoted as saying that Tim has not received a proposal from Oi [yet], nor is Tim in negotiations with Oi. In our view, this statement is not a big surprise as Oi and LetterOne have first to reach an agreement and work out a proposal to combine Oi and Tim, before the management of Tim, or more likely the management of Telecom Italia, can be contacted. These headlines have led to further selling pressure on OIBRBZ bonds and they jumped to a new all-time low, given not only seasonally reduced liquidity in this name. We still assume that Oi will be part of the consolidation in the Brazilian telecoms market. We continue to have a hold recommendation on OIBRBZ bonds, especially after the bonds fell strongly on the recent negative news flow and sentiment. This could change drastically if Oi is able to announce a potential transaction, e.g. with LetterOne. The weak macro-economic development is not a surprise, nor is the statement from Tim’s CEO. Stephan Haber, CFA (UniCredit Bank) +49 89 378-15192 [email protected] RCS & RDS (Hold) Monday, 7 December RCS & RDS reported 3Q15 results that were above our expectations, showing sustained, strong top-line growth with a slight margin improvement qoq. Revenues of EUR 193.6mn in 3Q15 were up 13.8% yoy (UniCredit EUR 180mn). Although there was some seasonal weakness in that the growth dynamic was down somewhat over the previous periods (1H15: 15.6%), the company managed to increase revenues sequentially as well (2Q15: EUR 185.5mn). The EBITDA margin was stable relative to 1H15 at 31.5% and EBITDA of EUR 60.9mn (UniCredit: EUR 56mn, margin 31%). This was a clear improvement over the level of around EUR 56-57mn that the company has generated each quarter since 2Q14. We calculate leverage at 2.8x, which is down slightly from 2.9x in 2Q15 (RCS & RDS calculation), although this can deviate somewhat from RCS & RDS’s reported figure depending on some other items that are included in debt (e.g. hedging). Therefore, leverage was basically stable qoq, as we expected. The main disappointment in the results is that RCS & RDS was again not able to lower capex, as the company has targeted, with a figure of EUR 57mn in 3Q15. This leads to EUR 162mn through 9M15, which means that the company is on track to significantly exceed the EUR 180mn target stated earlier this year. This drove FCF into negative territory again (EUR -6mn) and increased net debt (currency movements were likely another factor). In operational terms, top-line growth was evidently driven by subscriber additions, as pricing trends were often negative or positive by low single digits in 3Q15. Pricing in mobile telephony was up again and there were around 120,000 subscriber additions to 1.7mn. It therefore looks like it will take a few more quarters before RCS & RDS reaches its target of 2.0mn subscribers, which is the point where the company thinks that the mobile products will be sustainably profitable. RCS & RDS had a good quarter operationally in the most recent quarter, which can be softer due to the vacation period. Nevertheless, sustained subscriber growth paid off for the first time in a while in an improvement in EBITDA, which has been range-bound for several quarters. If the company can sustain – or grow – this level of EBITDA in the future, then the company could begin a deleveraging trend in the coming quarters. The main concern remains capex which looks set to exceed EUR 200mn in 2015 and thus even come in above the figure from last year of EUR 201mn. The CBLCSY bond has had a very strong performance since the beginning of October, which we believe is largely driven by rising demand for CEE assets in the context of expected looser ECB policy in 2016. In addition, investors appear to have a positive impression of Romania in a regional context, as demonstrated by the recent placement of the 10/25 Romanian UniCredit Research page 12 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes government bond with a coupon of 2.75% (currently yielding 2.5%). We believe this has helped CBLCSY to outperform ADRBID recently (Z-spread 103bp tighter than ADRBID currently). Both CEE bonds have significantly outperformed high-yield cable peers over the last three months and CBLCSY has been by far the best performer in the peer group over the last month. Moreover, with yields in CEE declining, we believe the likelihood that RCS & RDS will call the bond in November 2016 has increased. CBLCSY is trading near an all-time high, which would be a clear sell indication as there are similarly rated bonds within the high-yield cable universe with more attractive yields. However, we are reiterating our hold recommendation for now based on two factors: 1. The bonds are not very liquid, leading to a wide bid/ask spread. As a result, the current ask price implies a yield of 4.8% (compared to a bid yield of 2.6%), which represents an attractive carry, assuming that the bonds are likely to be called in November 2016. 2. Investors who want exposure to CEE may find the stability of CBLCSY as well as the current yield attractive in a regional context. However, for investors looking for high-yield cable exposure, CBLCSY no longer looks attractive and we would recommend switching into higher-yielding Altice or Liberty Global issues. Jonathan Schroer, CFA (UniCredit Bank) +49 89 378-13212 [email protected] TUI (Hold) Thursday, 10 December UniCredit Research TUI AG (Ba3s/BB-s/--) released solid FY14/15 results above our expectations on the turnover and EBITDA level, marked by increasing activity in Cruises and the strong performance of the Northern Region segment. The company reported that in FY14/15 underlying turnover increased by 8% yoy to EUR 20,012mn (FY13/14: EUR 18,537mn). The turnover increase was driven by a rise in customer numbers and the increase in average prices in some segments, which again reflected the pricing power of TUI Group. The company’s reported underlying EBITA rose by 23% to EUR 1,069mn or by 15.4% (excl. FX effects). This was driven by a particularly good performance of Northern Region, Hotels & Resorts and Cruises, despite the tragic events in Tunisia and other geopolitical challenges earlier in the year. In terms of EBITA by segments, Source Markets underlying EBITA increased to EUR 703mn from EUR 643mn yoy, driven by a strong trading performance in the UK (5% increase in customers), in spite of the tragic events in Tunisia at the end of June. This offset continued competitive market conditions in Germany and poor North Africa trading in France. In Hotels & Resorts, underlying FY14/15 EBITA increased to EUR 235mn from EUR 203mn the year before, driven by strong underlying performance, in particular by RIU and Robinson, offsetting a EUR 27mn negative impact from the events in Tunisia. In Cruises, underlying EBITA increased to EUR 81mn (FY13/14: EUR 10mn), particularly reflecting the full-year benefit of new capacities and the continued turnaround of Hapag-Lloyd Kreuzfahrten. Following the IPO of Hapag-Lloyd on 6 November 2015, TUI booked a EUR 147mn impairment for its 12.3% stake. Reported operating cash flow decreased to EUR 698mn vs. EUR 938mn in FY13/14, mainly due to weaker working-capital generation. Capex also increased remarkably, to EUR 489mn vs. EUR 285mn, due to hotel investments and the acquisition of Europa 2 (cruise ship). TUI reported net debt of EUR 214mn from a net cash position of EUR 293mn for FY13/14. The rise in net debt was related to 1. EUR 127mn from negative FX movements, 2. an additional EUR 693mn in asset-backed finance, primarily in relation to new aircraft deliveries under finance lease, as well as 3. the mainly debt-financed acquisition of Europa 2. TUI notes that its capital structure has been simplified significantly during the year as a result of the conversion of most of the outstanding TUI AG and TUI Travel PLC convertible bonds. In terms of outlook, TUI stated that, taking into account the continued cessation of flights in and out of Sharm el Sheikh in Egypt by several countries, current trading for Winter 2015/16 and Summer 2016 is in line with expectations. For the winter season, TUI reports 60% sold to date with flat bookings and average selling prices up 4%. Overall Source Market long-haul bookings are up 9%. Hence, for FY15/16 the company expects to deliver growth in brand turnover of 5% and in underlying EBITA of at least 10% and reiterates the page 13 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes previous guidance of at least 10% underlying EBITA CAGR over the three years from FY14/15 to FY17/18. TUI also targets net capex and investments of around EUR 750mn. For FY15/16 TUI has also set new financial targets based on a leverage ratio of 2.75-3.5x (3.0x in FY14/15), and an interest coverage ratio of 4.5-5.5x (4.7x in FY14/15). TUI stated that it intends to adjust these target corridors further in subsequent financial years to support its goal of improving its credit rating. A strategic review of Hotelbeds is also underway, including a potential disposal of the business, with the carve-out from Inbound Services expected to complete at the end of 2015 or beginning of 2016. As a reminder, in November, Bloomberg reported that TUI plans to sell its Hotelbeds online booking unit for around EUR 1bn. TUI runs Hotelbeds as an independent company. Hotelbeds offers rooms to online and traditional travel agencies and airlines with a database of beds at more than 72,000 hotels worldwide, plus transfers and tours. We like TUI’s commitment to its current rating and also its target for a neutral net financial debt position by FYE 2014/15. Furthermore, we note TUI’s diversified and stable business profile and its scale as Europe’s largest tour operator. We therefore keep our hold recommendation on the name. Mehmet Dere (UniCredit Bank) +49 89 378 11294 [email protected] Michael Gerstner (UniCredit Bank) +49 89 378-15449 [email protected] TeamSystem (Hold) Tuesday, 8 December Yesterday afternoon Sky News reported, citing unidentified “sources”, that TeamSystem (B2n/Bs/--) will be acquired by Hellman & Friedmann (H&F) for EUR 1.2bn (GBP 850mn). The article stated that HgCapital had agreed to sell TeamSystem to H&F. In the evening, TeamSystem confirmed that H&F will acquire a controlling interest in TeamSystem Holding SpA from HgCapital, Bain Capital, ICG and management. According to the statement, HgCapital and management will remain invested in the company via minority stakes. No further information was released (no purchase price, no refinancing information, etc.).We note that the purchase price of EUR 1.2bn (EV) mentioned by Sky News reflects a relatively high valuation. Assuming an expected EBITDA of around EUR 86-87mn in FY16 (EUR 79mn including future synergies in FY15 would result in an EV/EBITDA multiple of 15x), the EV/EBITDA multiple would be at around 13-14x. We note that in 2010, TeamSystem was acquired (by HgCapital) for an enterprise value of EUR 565mn, representing 11.3x FY10 EBITDA. In TeamSystem’s recent 3Q15 conference call, management stated that it is talking to a number of potential PE investors, “while there is no concrete plan/timing for an exit so far”. Hence, such a transaction does not come as a complete surprise. We note that TeamSystem was owned by HgCapital (53%), Bain Capital (23%), its management (16%) and ICG (7%). Given that in the announcement the company stated that HgCapital will “roll a minority portion of its proceeds into the new transaction”, we assume that the new transaction might change the capital structure of TeamSystem. Current leverage is already at 5.5x (which already includes future synergies), which is above the bond incurrence covenant of 5.0x. Hence, we expect that the existing bond will called at its first call date on 15 May 2016 at 103.6875 and that the capital structure of the company will be changed. Given that the company is already B2n/B-s rated by Moody’s and S&P, we do not see much room for additional debt load at this company for the time being, despite its strong growth potential. We keep our hold recommendation on the TITANL 7.375% 05/20 bond. At current valuations, we see little upside potential for the TITANL 7.375% 05/20 bond, as the bond will become callable on 15 May 2016 (@103.6875) and already trades above this call level. We note that an existing portability clause either does not apply (leverage >4.25x) or will probably not be used, as the bond trades significantly above 101. Stephan Haber, CFA (UniCredit Bank) +49 89 378-15192 [email protected] UniCredit Research page 14 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Voith (Hold) Thursday, 10 December Yesterday Voith (Ba1s/--/--) released FY14/15 results that were in line with guidance, showing strongly improved cash-flow generation in the second half of the year. Following an announcement in February 2015, the Industrial Services division is now reported as a discontinuing operation, thereby somewhat distorting the whole picture compared to guidance, which was given for constant scope. The figures below hence only refer to continuing operations. The company delivered slightly increased sales and stable new orders (+3% and +0% yoy, respectively), while both figures benefitted from positive currency effects. Despite sales of EUR 4.3bn and new orders amounting to EUR 4.4bn, the company’s backlog fell from EUR 5.4bn at FYE 2013/14 to EUR 5.3bn as of end-September, obviously as a result of order cancellations. Profit from operations as calculated by the company rose by 15%, with a remarkably improved contribution to profitability from the Paper segment, though admittedly from a very low level. The bottom line suffered from further restructuring charges of EUR 185mn (FY13/14: EUR 30mn), with a deeply negative net result of EUR -93mn (FY13/14: EUR 41mn), while clearly improved compared to the first half of the year (1H14/15: EUR -131mn). FOCF after capex of EUR 48mn for the full year (FY13/14: EUR 57mn) was still strongly affected by an increase of working capital of EUR 140mn for the whole year, whereas at least in the second half of the year working capital declined by EUR 82mn. Also due to the acquisition of a 25.1% stake in KUKA in December 2014, net debt surged to EUR 722mn (FYE14/15: EUR 145mn). In a difficult environment affecting four of Voith’s five end markets, i.e. energy, oil and gas, paper, and raw materials, the company’s self-help measures seem to be starting to pay off. The company should in a position to benefit if conditions improve. However, all these markets continue to have to deal with subdued expectations with no clear perspective of improvement in sight. Furthermore, next year the company may not be able to benefit from currency tailwinds as it has this year. For its other markets, transport and automotive, the company remains optimistic. All in all, for FY15/16 Voith guides for stable sales and orders received, improving operating results and a clearly positive net result. The FY14/15 numbers should translate into continuously constrained credit metrics. RCF/net debt as adjusted by Moody’s should increase somewhat to the mid-teens (LTM 1H14/15: 9.7%), whereas debt/EBITDA may remain at the elevated level of 1H14/15, i.e. around 7.2x. Moody’s regards RCF/net debt in the high teens as commensurate with the current Ba1 rating, while a debt/EBITDA ratio sustainably above 4.5x would imply rating pressure. Adjusting for the one-off restructuring effects, we calculate numbers that would largely satisfy the agency’s requirements. Furthermore, the targeted sale of the Industrial Services business, if successful, will clearly lift credit metrics to acceptable levels. On a different note, the company announced the founding of a new group division called Digital Solutions. The new division will be formed to pool the digitalization and automation businesses, aiming at enhancing growth in digital markets. Digital Solutions will start with about 600 employees and revenues of EUR 250mn from current business. While there may be benefits from this concentration at some stage, we hope no further material restructuring charges will accompany it, becoming a permanent item in the company’s results as opposed to being a one-off. Moody’s already cautioned that for the Ba1 rating the majority of restructuring expenses should be provided by now, to allow leverage ratios to come down from elevated levels in FY15/16. The most severe threat to Voith retaining its current rating comes from the company’s rumored pursuit of a takeover of KUKA, which we recently addressed in our High Yield & Crossover Update (26 Nov). As, on the one hand, operational results are improving, but on the other, there are risks such as a possible acquisition of KUKA on the road ahead, and also due to the short bond maturity, we do not see yesterday’s results materially affecting the VOITGR 06/17 bond price and keep our hold recommendation on the name. Stephan Haber, CFA (UniCredit Bank) +49 89 378-15192 [email protected] UniCredit Research David Bertholdt (UniCredit Bank) +49 89 378-13211 [email protected] page 15 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes HY Issuers and Bonds Sec CON Name Instrument Accor (Hold) FR0012005924 4.125% PERP (SUB) PX Yield Spd TR 1w TR 1m ER 1w -1.5 -0.7 -0.6 ER 1m LQ 103 --/BB/BB 98.6 4.5 427 XS0776111188 9.875% 01/05/19 B2/B/-- 107.4 3.6 253 -0.3 +0.5 +0.6 +1.5 - XS0836495183 9.125% 01/02/20 B2/B/-- 107.8 4.2 238 +0.2 +0.4 +1.1 +1.5 - B2/B/-- 106.7 5.9 450 +0.1 +0.7 +1.0 +1.7 - B2/B+/-- 105.6 4.7 460 -0.1 +1.3 +0.8 +2.4 - --/BB+/BB+ 99.0 4.1 374 -0.2 -0.2 +0.7 +0.9 + Caa1/B-/-- 110.2 4.9 473 -0.1 +0.7 +0.8 +1.8 + Agrokor (Hold) +0.4 + AGROK Albea Beauty (no rec) ALBHSA XS0783934168 8.75% 01/11/19 Alize (no rec) ALLGRP XS1137505290 6.25% 01/12/21 Arcelik (no rec) ACKAF XS1109959467 3.875% 16/09/21 Auris (no rec) AUDIOL XS1153374084 8% 15/01/23 Autodis (no rec) AUTODI XS0982711128 6.5% 01/02/19 B2/B/-- 103.7 3.4 201 -0.2 +0.2 +0.7 +1.3 - B3/CCC+/-- 98.3 9.5 942 -1.0 -0.7 -0.1 +0.4 - BE0933072291 6% 13/07/17 Ba1/BB+/-- 108.1 0.9 89 -0.1 -0.1 +0.8 +1.0 + BE6222320614 5.625% 15/06/21 Ba1/BB+/-- 117.9 2.2 185 +0.0 +0.3 +0.8 +1.4 - B2/B/-- 94.0 8.6 853 -0.9 -0.3 +0.0 +0.8 - B2/B+/-- 87.9 7.1 672 -3.0 -2.7 -2.1 -1.7 + B3/B/-- 105.0 6.3 162 -0.4 +0.3 +0.5 +1.4 + B3/B/B 105.8 4.2 366 +0.0 +1.7 +0.9 +2.7 - Ba3/BB+/-- 101.2 3.1 293 -0.5 +0.5 +0.4 +1.5 - B1/B+/-- 105.7 +0.0 +0.5 +0.9 +1.5 + -2.9 -2.1 -1.9 - XS1117280039 9% 15/11/20 (PIK) Barry Callebaut (no rec) Boing (no rec) BARY IMOCAR XS1028951009 6.625% 15/07/19 Boparan (no rec) BOPRLN XS1082473395 4.375% 15/07/21 Bormioli Rocco (Hold) BORMIO XS0615235966 10% 01/08/18 Brakes Capital (no rec) BRKCAP XS1071435561 FRN 15/12/18 BUT (no rec) B3/B-/-- BUTSAS XS1080611970 7.375% 15/09/19 Campofrio (no rec) CPFSM XS1117299211 3.375% 15/03/22 Carlson Wagonlit (no rec) CARWAG XS0652911776 7.5% 15/06/19 Casino Guichard-Perrachon (Hold) COFP 5Y CDS FR0011606169 4.87% PERP (SUB) 312 --/BB/BB 93.7 7.3 714 -2.9 XS0506591519 8.75% 15/05/18 B3/B+/-- 101.9 4.1 426 -0.5 +0.5 +0.4 +1.5 + XS1227583033 5.875% 15/05/23 B3/B+/-- 96.9 6.4 587 -1.4 +1.7 -0.5 +2.8 + XS0604641034 6.25% 09/03/18 Ba2/BB+/-- 107.9 2.6 260 +0.0 +0.5 +0.9 +1.5 + XS1046851025 2.75% 18/03/19 Ba2/BB+/-- 100.3 2.7 263 -0.5 +0.5 +0.4 +1.5 + XS1114452060 2.875% 27/09/21 Ba2/BB+/-- 99.6 3.0 261 -0.3 +0.7 +0.6 +1.8 + Ba3/BB+/-- 97.8 5.2 474 -0.1 +3.5 +0.8 +4.5 - --/BB-/-- 106.3 3.1 301 +0.1 +0.0 +1.0 +1.0 - --/B/-- 108.2 2.1 208 +0.1 +0.5 +1.0 +1.6 + XS1251078009 6.25% 15/07/22 B1/B/-- 106.3 4.8 454 +0.2 +1.0 +1.0 +2.0 + XS1251078694 8.75% 15/07/23 Caa1/CCC+/-- 104.1 7.7 749 +0.0 +2.1 +0.9 +3.1 + Cirsa (Buy) CIRSA CNH Industrial (Sell) Darling Ingredients (no rec) CNHI DAR XS1240984754 4.75% 30/05/22 Darty (no rec) DRTYLN XS1038807340 5.875% 01/03/21 Deutsche Raststaetten (no rec) TANKRA XS0997664411 6.75% 30/12/20 Douglas (Hold) Rating ACFP 5Y CDS DOUGR Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 16 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec CON Name Instrument Dufry (no rec) TR 1m ER 1w ER 1m LQ 105.7 3.0 284 -0.4 -0.1 +0.4 +0.9 - Ba3/BB/BB- 104.7 3.6 326 -0.3 -0.2 +0.6 +0.8 - XS0596918135 9.5% 01/03/18 Caa2/CC/-- 69.7 30.8 2,892 +6.2 +10.4 +7.1 +11.5 - XS0888936118 9.5% 01/03/18 Caa2/CC/-- 67.1 32.3 3,103 +2.4 +7.0 +3.3 +8.1 - Ba3/BB/BB 106.4 2.3 253 -0.4 -0.2 +0.5 +0.9 - XS1028950704 5.125% 15/07/21 B2/B+/-- 104.6 3.7 365 -0.8 -0.3 +0.1 +0.8 + XS1241053666 5.75% 15/06/22 B3/B-/-- 105.1 4.6 432 -0.7 +0.6 +0.2 +1.6 + B1/--/BB- 98.5 3.4 294 -0.4 +3.3 +0.5 +4.3 + XS0764640149 7% 23/03/17 B2/BB-/BB- 106.7 1.7 173 +0.0 +0.5 +0.9 +1.6 + XS0305093311 5.625% 12/06/17 B2/BB-/BB- 105.6 1.8 188 -0.2 +0.4 +0.7 +1.4 + XS0906420574 6.625% 15/03/18 B2/BB-/BB- 110.0 2.1 208 +0.0 +0.5 +0.9 +1.5 + XS0647264398 7.375% 09/07/18 B2/BB-/BB- 112.6 2.3 229 +0.1 +0.5 +1.0 +1.5 + EDCON ELRFP XS0808635600 6.5% 01/05/20 EUROCA Faurecia (Buy) EOFP XS1204116088 3.125% 15/06/22 FCA (Buy) FCAIM XS0953215349 6.75% 14/10/19 B2/BB-/BB- 114.4 2.8 266 +0.0 +0.2 +0.9 +1.3 + XS1048568452 4.75% 22/03/21 B2/BB-/BB- 107.9 3.1 284 -0.2 +0.5 +0.7 +1.5 + XS1088515207 4.75% 15/07/22 B2/BB-/BB- 107.5 3.5 302 -0.3 +0.9 +0.6 +1.9 + XS1054086928 FRN 15/04/19 B3/B-/-- 84.7 10.5 1,065 -1.6 -6.0 -0.8 -4.9 + XS1054087496 FRN 15/10/19 Caa2/CCC/-- 75.9 16.0 1,607 -11.3 -13.4 -10.5 -12.3 - --/CCC+/-- 100.6 9.7 796 +0.1 +0.4 +1.0 +1.4 - B2/B+/-- 98.0 9.3 920 -0.7 -0.3 +0.1 +0.8 - B2/B/-- 107.1 4.8 445 +0.1 +1.6 +1.0 +2.6 - Financiere Quick (no rec) Findus (no rec) QUIBB FINDUS XS1028948716 8.25% 01/08/19 (PIK) Frigoglass (no rec) FRIGOG XS0932291007 8.25% 15/05/18 FTE Automotive (Hold) FTEAU XS0952827094 9% 15/07/20 Galapagos (no rec) GALAPG XS1071411547 FRN 15/06/21 B1/B/-- 95.7 5.6 573 +0.2 -0.7 +1.1 +0.4 + XS1071419524 5.375% 15/06/21 B1/B/-- 96.8 6.2 577 +0.3 +0.7 +1.2 +1.8 + Caa1/CCC+/-- 87.6 9.6 921 -0.3 -4.2 +0.6 -3.1 + B2/B/-- 92.8 10.3 1,042 -2.4 +0.7 -1.5 +1.8 + B1/BB/-- 104.3 3.2 283 -0.1 +1.1 +0.8 +2.2 + Ba1/BB/BB 103.7 1.1 31 -0.2 +0.1 +0.7 +1.2 + XS1046537665 4.75% 01/04/21 B1/BB-/-- 103.8 3.5 347 -0.7 +1.7 +0.2 +2.8 + XS1246049073 5.125% 30/06/22 B1/BB-/-- 104.5 4.1 380 -0.5 +2.3 +0.4 +3.3 - XS1075833860 6.25% 15/06/19 --/B/-- 77.0 15.1 1,486 +2.4 +5.6 +3.3 +6.7 + XS1075799319 FRN 15/06/19 --/B/-- 74.2 14.6 1,470 +3.1 +6.1 +4.0 +7.2 + XS1075845526 8.5% 15/12/19 --/CCC+/-- 48.4 32.9 3,227 +10.8 +12.9 +11.7 +14.0 + XS1071420027 7% 15/06/22 Gamenet (Hold) GAMENT XS0954289913 7.25% 01/08/18 Gestamp (Hold) GESTAM XS0925126491 5.875% 31/05/20 Goodyear (Hold) GT XS0615238630 6.75% 15/04/19 Grupo Antolin (Buy) ANTOLN HEMABV HTZ 5Y CDS XS0995045951 4.375% 15/01/19 377 B2/B/-- 103.9 3.1 302 +0.3 +0.4 +1.2 +1.5 + Ba1/BB+/-- 108.3 1.9 165 -0.3 +0.3 +0.6 +1.4 + B2/B+/BB 105.9 5.8 560 +0.0 +0.9 +0.9 +2.0 - HBMGR DE000A1R02E0 3.875% 15/02/20 HP Pelzer (Hold) TR 1w Ba3/BB/BB- Europcar (Hold) Hornbach (Hold) Spd XS1266592457 4.5% 01/08/23 Elior (no rec) Hertz (Sell) PX Yield XS1087753353 4.5% 15/07/22 Edcon Proprietary (no rec) Hema (no rec) Rating DUFSCA PELHOL XS1028947585 7.5% 15/07/21 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 17 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec CON Name Instrument Hydra (no rec) Rating PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ -0.1 +1.1 +1.0 + HYDHLD XS1059509429 FRN 15/04/19 Iglo Foods (no rec) B2/B/-- IGBOND XS1084586822 FRN 15/06/20 B1/BB-/-- 100.4 3.8 396 +0.2 XS0564487568 6.625% 02/02/18 Ba2/BB+/-- 109.5 2.2 211 -0.1 -0.2 +0.8 +0.8 + XS1204431867 4.125% 15/02/20 Ba2/BB+/-- 101.0 3.9 375 -0.5 +0.1 +0.4 +1.2 + XS0860855930 4.75% 05/03/20 Ba2/BB+/-- 101.9 4.2 411 -0.7 +0.3 +0.2 +1.4 + XS1204434028 4.75% 15/02/23 Ba2/BB+/-- 96.2 5.4 488 -1.0 -0.7 -0.1 +0.3 + --/B/B 98.8 7.1 672 -1.2 -0.4 -0.3 +0.7 + XS0947176631 9.75% 15/08/18 B1/B/BB- 105.4 6.5 636 -0.7 -0.4 +0.2 +0.6 - XS1064899120 6% 15/05/21 B1/B/BB- 92.9 7.7 733 -1.2 -1.0 -0.3 +0.1 - --/BB-/-- 105.0 3.1 230 +0.0 +0.8 +0.9 +1.8 + Ba3/BB/-- 105.1 2.9 244 +1.8 +2.4 +2.7 +3.4 + --/B/B+ 106.1 3.0 294 -0.1 +0.5 +0.8 +1.5 - IGT (Buy) IGT Ikks (no rec) IKKSFR XS1084836441 6.75% 15/07/21 Intralot (no rec) INLOTG IVS Group (no rec) IVSIM XS0911441409 7.125% 01/04/20 Jarden (no rec) JAH XS1084944096 3.75% 01/10/21 Labeyrie (no rec) LABERE XS1044528849 5.625% 15/03/21 Lufthansa (Hold) LHAGR 5Y CDS XS1109110251 1.125% 12/09/19 120 Ba1/BBB-/-- 100.6 1.0 88 +0.1 -0.1 +0.9 +0.9 + --/BB/-- 103.2 4.5 417 -0.5 +0.8 +0.4 +1.9 + B3/B/-- 95.2 9.8 962 -0.2 -0.5 +0.7 +0.5 - B2/B/-- 103.4 6.6 757 +0.0 +0.6 +0.9 +1.6 - B2/B-/-- 104.5 6.9 678 +0.0 -0.1 +0.9 +0.9 + Ba2/BB/-- 98.1 3.1 267 -1.0 +0.4 -0.1 +1.5 - --/BB+/-- 97.5 4.7 432 -0.5 +1.0 +0.4 +2.1 + B1/B/B 99.8 4.6 467 +0.0 +0.0 +0.9 +1.1 - --/B/B+ 111.0 3.0 280 +0.2 +1.4 +1.1 +2.4 + Ba2/BB/-- 98.6 3.3 283 -0.3 +0.6 +0.6 +1.6 + Ba2/BB/-- 107.0 2.4 226 +0.3 +0.8 +1.1 +1.8 + FR0011233451 5.625% 11/07/17 Ba3/BB-/BB 107.0 1.2 122 +0.1 +0.2 +0.9 +1.3 + FR0011439975 7.375% 06/03/18 Ba3/BB-/BB 113.2 1.4 138 -0.1 +0.6 +0.8 +1.7 + FR0011567940 6.5% 18/01/19 Ba3/BB-/BB 115.6 1.4 132 +0.1 +1.1 +1.0 +2.2 + FR0010014845 6% 19/09/33 Ba3/BB-/BB 112.9 4.9 363 -1.0 -0.1 -0.1 +1.0 + B1/B+/BB- 103.4 3.6 353 -0.7 -0.5 +0.2 +0.6 + B3/B-/CCC+ 108.1 4.0 373 -0.1 +0.6 +0.8 +1.7 + XS1271836600 5.125% 12/08/75 (SUB) LuxGEO Travel (no rec) LUXGEO XS0879569464 7.5% 01/08/18 Magnolia (no rec) MDMFP XS0955023931 9% 01/08/20 Marcolin (no rec) MCLIM XS0991759076 8.5% 15/11/19 Merlin Entertainments (no rec) MERLLN XS1204272709 2.75% 15/03/22 Motherson (Buy) MSSIN XS1082399301 4.125% 15/07/21 New Look (no rec) NEWLOK XS1248517341 FRN 01/07/22 NH Hoteles (no rec) NHHSM XS0954676283 6.875% 15/11/19 Novalis (no rec) ELISGP XS1225112272 3% 30/04/22 ODEON & UCI Cinemas (no rec) ODEON XS0627135774 FRN 01/08/18 Ontex (Hold) B3/CCC+/-- ONTEX BE6272861657 4.75% 15/11/21 Peugeot (Hold) UGFP Piaggio (Sell) PIAGIM XS1061086846 4.625% 30/04/21 Picard Surgeles (no rec) PICSUR XS1117298833 7.75% 01/02/20 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 18 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec CON Name Instrument Port Aventura (no rec) B3/B-/-- XS0982712365 7.25% 01/12/20 B3/B-/-- 104.0 Caa1/CCC+/-- 102.1 B2/B/-- 103.8 XS1080255067 4.75% 15/05/20 Rhiag (Hold) TR 1m ER 1w ER 1m LQ 5.9 579 +0.1 +0.2 +1.0 +1.3 + +0.0 +0.8 +0.9 +1.9 + 2.3 145 +0.0 +0.9 +0.9 +1.9 + XS0986071453 FRN 15/12/19 B1/B/-- 101.0 +0.6 -1.6 +1.4 -0.5 - XS0986071537 7.25% 15/11/20 B1/B/-- 107.3 3.1 296 -0.6 +0.4 +0.3 +1.4 + B2/B/-- 106.7 6.0 564 +0.3 +2.3 +1.2 +3.3 - LPLAYG XS1029172514 8.25% 15/02/21 Schaeffler (Buy) SHAEFF 5Y CDS XS0923613060 4.25% 15/05/18 146 Ba2/BB-/-- 102.2 1.9 143 -0.1 +0.2 +0.8 +1.3 - Ba3/B/-- 103.6 4.1 355 -0.3 +0.2 +0.6 +1.3 + XS1067862919 2.75% 15/05/19 Ba2/BB-/-- 101.5 2.2 197 -0.1 +0.1 +0.8 +1.1 + XS1067864881 3.25% 15/05/19 B1/B/-- 101.7 2.6 230 -0.2 -0.2 +0.7 +0.8 + XS1212469966 2.5% 15/05/20 Ba2/BB-/-- 101.1 2.2 211 +0.0 +0.4 +0.9 +1.4 + Ba3/B/-- 108.1 2.9 295 -0.3 +0.6 +0.6 +1.7 + XS1067864022 3.5% 15/05/22 Ba2/BB-/-- 102.8 2.7 262 -0.1 +0.2 +0.8 +1.2 + XS1212470972 3.25% 15/05/25 Ba2/BB-/-- 98.6 3.5 263 -0.3 -0.7 +0.6 +0.4 + B2/B+/-- 97.3 7.3 705 -1.8 -0.8 -0.9 +0.3 + B1/B/-- 98.8 8.1 789 -0.2 -0.6 +0.6 +0.4 + B3/B/-- 107.4 3.4 293 +0.0 -0.1 +0.9 +0.9 - XS0954907787 6.875% 15/08/18 (PIK) XS1126486239 5.75% 15/11/21 (PIK) Selecta (no rec) SELNSW XS1078234330 6.5% 15/06/20 Sisal Holding (no rec) SISTP XS0931919947 7.25% 30/09/17 SMCP (no rec) SMCPFP XS0943327378 8.875% 15/06/20 Snai (Sell) SNAIM XS0982712449 7.625% 15/06/18 XS0982711805 12% 15/12/18 Takko (no rec) B2/B-/-- 97.9 8.7 858 -0.7 -2.7 +0.2 -1.7 - Caa2/CCC/-- 94.4 14.6 1,436 -1.2 -5.8 -0.3 -4.8 - Caa1/CCC+/-- 61.5 28.6 2,840 -0.9 -7.5 +0.0 -6.4 + B1/BB/BB 92.0 6.7 633 -3.2 +1.8 -2.3 +2.8 + TAKKO XS0908516080 9.875% 15/04/19 Tereos (no rec) TEREOS FR0011439900 4.25% 04/03/20 Tesco (Hold) TSCOLN 5Y CDS 303 XS0992632702 1.25% 13/11/17 Ba1/BB+/BB+ 99.9 1.3 132 +0.0 -0.1 +0.9 +1.0 + XS0697395472 3.375% 02/11/18 Ba1/BB+/BB+ 104.0 2.0 193 -0.2 -0.7 +0.7 +0.4 + XS1082970853 1.375% 01/07/19 Ba1/BB+/BB+ 96.7 2.4 228 -0.2 -1.4 +0.7 -0.4 + XS0992638220 2.125% 12/11/20 Ba1/BB+/BB+ 97.6 2.7 241 -0.1 -1.4 +0.8 -0.3 + XS1082971588 2.5% 01/07/24 Ba1/BB+/BB+ 90.5 3.8 311 -0.2 -2.2 +0.6 -1.1 + XS0295018070 5.125% 10/04/47 Ba1/BB+/BB+ 85.5 6.2 481 -0.6 -4.4 +0.2 -3.3 + B2/B/-- 105.4 5.1 500 -0.6 -1.0 +0.3 +0.1 - XS0937169570 7.75% 15/06/20 --/B/B+ 105.7 4.5 398 +0.3 +0.7 +1.2 +1.7 + XS1172436211 6.75% 15/06/21 --/B/B+ 106.1 5.1 502 +0.2 +0.5 +1.1 +1.5 - Thom Europe (no rec) THOEUR XS1087760648 7.375% 15/07/19 Thomas Cook (Hold) TCGLN TUIGR 5Y CDS XS1028943162 4.5% 01/10/19 120 Ba3/BB-/-- 105.1 1.3 101 -0.1 +0.1 +0.8 +1.2 + B1/B/-- 95.4 7.4 751 -0.2 +2.3 +0.7 +3.3 + B3/CCC+/-- 106.1 5.7 520 -0.2 +0.7 +0.7 +1.7 + TWSSBS XS1086778641 FRN 15/07/19 UNIVEG XS0992644038 7.875% 15/11/20 Volvo (Hold) TR 1w RHIGIM Safari (no rec) Univeg (no rec) Spd ICECR XS0928190940 9.25% 15/05/18 (PIK) Twinset (no rec) PX Yield XS0982712019 FRN 01/12/19 R&R Ice Cream (no rec) TUI (Hold) Rating PORTAV VLVY 5Y CDS 102 XS1150673892 4.2% 10/06/75 (SUB) Ba1/--/BB+ 98.5 4.6 439 -0.9 -0.9 +0.0 +0.1 + XS1150695192 4.85% 10/03/78 (SUB) Ba1/--/BB+ 96.9 5.4 484 -1.6 -1.3 -0.7 -0.2 + Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 19 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec CON Name Instrument Vougeot (no rec) XS0953085627 FRN 15/07/20 WEPA (no rec) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ B2/B/-- WEPAHY DE000A1TNA88 6.5% 15/05/20 B1/BB/-- 106.6 3.0 246 -0.1 +0.2 +0.8 +1.2 - DE000A14J7F8 2.25% 26/04/19 Ba2/BB/-- 100.1 2.3 217 -0.1 +1.1 +0.8 +2.2 + DE000A14J7G6 2.75% 27/04/23 Ba2/BB/-- 96.6 3.3 272 -0.5 +1.7 +0.4 +2.7 + B2/B+/-- 102.1 6.2 503 +0.1 +0.6 +1.0 +1.6 - --/--/BB- 97.6 5.2 517 -0.2 +0.3 +0.7 +1.3 + Caa1*-/CCC+/-- 59.8 20.1 1,980 +3.6 -23.6 +4.5 -22.6 + ZF Friedrichshafen (Buy) Zobele (Hold) ZFFNGR ZOBELE XS0882293557 7.875% 01/02/18 ENG Rating VUECIN Bulgarian Energy (no rec) BULENR XS0989152573 4.25% 07/11/18 CGG (no rec) CGGFP XS1061175607 5.875% 15/05/20 Chesapeake Energy (no rec) CHK 5Y CDS XS0273933902 6.25% 15/01/17 CP Energy (no rec) 3,677 B3/BB-*-/BB-*- 78.8 38.5 3,195 -3.9 -17.1 -3.0 -16.0 - B1/--/B+ 100.1 6.6 680 -3.2 -2.7 -2.3 -1.7 - ENAPHO XS0982708769 7% 01/02/21 EDP (Buy) EDPPL XS0399353506 0% 12/11/23 PTEDPUOM0024 5.375% 16/09/75 (SUB) ENCE (no rec) 79.5 3.1 227 +0.5 +2.4 +1.4 +3.5 - 99.5 5.5 521 -1.3 +0.7 -0.4 +1.7 + Ba3/BB-/-- 103.6 4.6 432 -0.3 +0.8 +0.6 +1.9 - ENCSM XS1117280112 5.375% 01/11/22 Enel (Buy) ENELIM 5Y CDS 87 XS0954675129 6.5% 10/01/74 (SUB) Ba1/BB+/BBB- 108.8 3.5 343 -0.3 +0.0 +0.5 +1.1 - XS1014997073 5% 15/01/75 (SUB) Ba1/BB+/BBB- 105.3 3.6 346 -0.5 -0.3 +0.4 +0.7 - Gas Natural (Hold) GASSM 5Y CDS XS1139494493 4.125% PERP (SUB) 99 Ba1/BB+/BBB- 97.0 4.7 413 -0.6 -0.6 +0.3 +0.5 + Ba1/--/BBB- 88.8 5.1 435 -1.5 -2.9 -0.6 -1.8 + XS0805582011 3.755% 15/03/17 Ba1/BB+/BBB- 100.7 3.3 327 -0.6 -0.1 +0.3 +1.0 + XS0276455937 5.136% 22/03/17 Ba1/BB+/BBB- 102.4 3.2 322 -0.5 -0.1 +0.4 +1.0 + XS0290581569 5.44% 02/11/17 Ba1/BB+/BBB- 104.3 3.3 312 -0.2 -0.1 +0.7 +0.9 + XS0327237136 6.605% 13/02/18 Ba1/BB+/BBB- 106.1 3.7 365 -0.6 -0.4 +0.3 +0.7 + XS0954912514 3.7% 25/07/18 Ba1/BB+/BBB- 100.7 3.5 343 -0.8 +0.2 +0.1 +1.3 + XS1307381928 4.625% 15/10/18 Ba1/BB+/BBB- 102.6 3.7 364 -0.6 +0.5 +0.3 +1.6 - XS0906946008 3.389% 20/03/20 Ba1/BB+/BBB- 96.9 4.3 404 -0.5 +0.7 +0.4 +1.8 + XS1038646078 3.6% 26/02/21 Ba1/BB+/BBB- 96.8 4.3 403 -0.6 +0.9 +0.3 +1.9 + XS0906949523 4.364% 21/03/25 Ba1/BB+/BBB- 96.8 4.8 403 -1.0 -0.2 -0.1 +0.9 + Ba1/BB+/BBB- 98.1 3.8 383 -0.4 +0.6 +0.5 +1.7 + --/BB/BBB- 106.2 1.3 131 -0.1 +0.0 +0.8 +1.0 + -3.4 -3.3 -2.5 -2.2 + XS1224710399 3.375% 29/12/49 (SUB) Gazprom (no rec) GAZPRU Gazprom Neft (Hold) SIBNEF XS0922296883 2.933% 26/04/18 MOL (Hold) MOLHB XS0503453275 5.875% 20/04/17 Origin Energy (no rec) ORGAU 5Y CDS XS1109795176 4% 16/09/74 (SUB) Petrobras (no rec) --/BB+/-Ba2/B+/BB 253 Ba2/BB/-- 86.0 8.6 PETBRA 5Y CDS 832 920 XS0982711631 2.75% 15/01/18 Ba3*-/BB/BBB- 80.0 14.5 1,448 -7.1 -8.3 -6.2 -7.2 + XS0716979249 4.875% 07/03/18 Ba3*-/BB/BBB- 82.9 14.4 1,436 -6.8 -8.6 -6.0 -7.5 + XS0835886598 3.25% 01/04/19 Ba3*-/BB/BBB- 73.5 13.9 1,372 -8.9 -11.5 -8.0 -10.5 + XS0982711987 3.75% 14/01/21 Ba3*-/BB/BBB- 69.0 12.4 1,203 -9.4 -11.0 -8.5 -9.9 + XS0716979595 5.875% 07/03/22 Ba3*-/BB/BBB- 74.0 12.1 1,164 -7.7 -9.9 -6.8 -8.9 + XS0835890350 4.25% 02/10/23 Ba3*-/BB/BBB- 73.0 10.1 867 -3.8 -4.7 -2.9 -3.6 + XS0982711714 4.75% 14/01/25 Ba3*-/BB/BBB- 71.9 10.2 877 -1.2 -2.9 -0.3 -1.8 - Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 20 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec ENG Name Instrument Repsol (Buy) Spd TR 1w TR 1m ER 1w ER 1m LQ 228 Ba1/--/BB+ 88.2 6.6 631 -3.4 -4.1 -2.6 -3.0 + XS1207058733 4.5% 25/03/75 (SUB) Ba1/BB/BB+ 80.7 7.5 668 -4.0 -6.0 -3.1 -4.9 + RWE 5Y CDS 121 XS1219498141 2.75% 21/04/75 (SUB) Ba1/BB+/BBB-*- 87.0 6.0 567 -1.6 -0.2 -0.7 +0.9 + XS1219499032 3.5% 21/04/75 (SUB) Ba1/BB+/BBB-*- 80.0 6.4 560 -2.2 -2.5 -1.3 -1.4 + Caa2/B-/-- 103.3 +5.7 +5.5 +6.6 +6.5 + Stork Technical Services (no rec) STTESE XS0808757388 11% 15/08/17 Veolia Environnement (Hold) VIEFP 5Y CDS FR0011391820 4.45% PERP (SUB) Viridian (no rec) 64 Baa3/BB+/BB+ 103.8 2.8 276 -0.1 +0.5 +0.8 +1.6 - B2/--/B+ 104.6 6.2 602 +0.1 +2.8 +1.0 +3.9 + B2/B/BB- 89.0 9.7 950 -2.6 -8.3 -1.7 -7.2 - --/CCC+/-- 92.6 11.5 1,161 -2.3 -1.6 -1.4 -0.5 + B2/--/B 83.1 11.8 1,136 -0.2 -4.7 +0.7 -3.7 - B3/--/-- 82.2 17.5 1,716 -0.9 -7.8 +0.0 -6.8 - VRDLN XS1179900102 7.5% 01/03/20 Alain Afflelou (Hold) AAFFP XS1028956909 5.625% 15/04/19 ALBA Group (Buy) ALBALN DE000A1KQ177 8% 15/05/18 Aldesa (no rec) ALDESA XS1028959754 7.25% 01/04/21 Algeco Scotsman (no rec) ALGSCO XS0836306471 9% 15/10/18 ArcelorMittal (Hold) MTNA 5Y CDS 814 XS0559641146 5.875% 17/11/17 Ba2/BB/BB+ 100.0 5.9 594 -4.3 -4.3 -3.4 -3.2 + XS0765621569 5.75% 29/03/18 Ba2/BB/BB+ 98.9 6.5 631 -4.6 -4.9 -3.7 -3.8 + XS1214673565 FRN 09/04/18 Ba2/BB/BB+ 90.9 6.2 636 -3.9 -4.3 -3.0 -3.2 + XS1048518358 3% 25/03/19 Ba2/BB/BB+ 90.5 6.4 626 -4.7 -5.7 -3.8 -4.6 + XS1084568762 2.875% 06/07/20 Ba2/BB/BB+ 85.1 6.9 658 -5.1 -6.6 -4.3 -5.6 + XS1214673722 3% 09/04/21 Ba2/BB/BB+ 80.8 7.6 722 -7.4 -10.7 -6.6 -9.7 + XS1167308128 3.125% 14/01/22 Ba2/BB/BB+ 79.9 7.5 696 -7.0 -10.3 -6.1 -9.3 + Ardagh Glass (Sell) ARGID 5Y CDS 360 XS1076715108 8.375% 15/06/19 (PIK) Caa2/CCC+/-- 104.0 8.5 850 -2.0 -0.3 -1.1 +0.8 - XS0547019777 9.25% 15/10/20 Caa1/CCC+/-- 105.1 4.5 297 +0.1 +0.4 +1.0 +1.5 + XS1082043388 4.25% 15/01/22 Ba3/B+/-- 101.9 3.7 360 -0.4 +0.4 +0.4 +1.5 + FR0011125442 4.625% 05/10/17 --/BB-/-- 105.0 1.9 183 -0.3 -0.2 +0.6 +0.9 + FR0010817452 4.375% 06/11/19 --/BB-/-- 106.3 2.7 255 -0.1 +0.6 +0.8 +1.7 + FR0011560986 3.25% 04/09/20 --/BB-/-- 100.6 3.2 291 -0.6 +0.1 +0.3 +1.1 + FR0010941690 3.5% 22/03/21 --/BB-/-- 101.2 3.3 297 -0.3 +0.4 +0.6 +1.4 - FR0011791391 3.125% 20/03/23 --/BB-/-- 96.1 3.8 321 -0.4 +0.1 +0.5 +1.1 + FR0010804500 4.875% 23/09/24 --/BB-/-- 104.1 4.3 359 -0.4 +0.2 +0.5 +1.3 + Ba1/BB+/-- 100.1 4.8 449 -1.2 -1.5 -0.3 -0.4 + B1/B+/B+ 97.8 7.7 746 -4.5 -6.7 -3.6 -5.7 + B2/B/-- 108.6 2.8 261 -0.2 +1.0 +0.7 +2.0 - --/BBB-/BB+ 102.1 1.9 170 +0.0 +0.3 +0.9 +1.3 - B1/B+/-- 104.5 4.4 403 -0.3 -0.2 +0.6 +0.8 + Ba3/BB-/-- 104.3 3.8 309 -0.1 +0.0 +0.8 +1.1 - XS1330978211 3.5% 15/12/20 Ba1/BB+/BB+ 102.8 2.9 265 + XS1330978567 4.375% 15/12/23 Ba1/BB+/BB+ 103.3 3.9 326 + Areva (Hold) CEIFP Arkema (Buy) AKEFP FR0012278539 4.75% PERP (SUB) Astaldi (no rec) ASTIM XS1000393899 7.125% 01/12/20 Atalian (no rec) ATALIA XS0873629223 7.25% 15/01/20 Autostrada B. V. V. P. (no rec) ABVVPS XS1205716720 2.375% 20/03/20 Avis Budget Group (no rec) CAR XS0898656037 6% 01/03/21 Axalta Coating Systems (no rec) AXTA XS0874859605 5.75% 01/02/21 Ball (no rec) PX Yield XS1207054666 3.875% PERP (SUB) RWE (Hold) IDU Rating REPSM 5Y CDS BLL Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 21 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument Befesa Zinc (no rec) XS0625719777 8.875% 15/05/18 Belden (no rec) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ B1/B/-- 100.8 8.4 835 -0.1 -1.3 +0.8 -0.3 - Ba3/B+/-- 102.3 5.1 473 +0.2 +0.4 +1.1 +1.4 - Caa1/CCC+/-- 99.2 10.2 1,130 -0.9 -3.1 +0.0 -2.1 - --/BB+/-- 100.5 2.3 214 -0.9 -1.9 +0.0 -0.9 + B2/B/B 86.5 9.4 907 -5.8 -7.4 -5.0 -6.4 + --/BB+/-- 111.9 2.0 187 +0.1 +0.4 +1.0 +1.4 - BDC XS0903269370 5.5% 15/04/23 (SUB) Bilbao Luxembourg (no rec) BBAOLX XS0983942656 10.5% 01/12/18 (PIK) Bilfinger (Sell) GBFGR DE000A1R0TU2 2.375% 07/12/19 BMBG (no rec) BMBGBN XS1056054551 FRN 15/10/20 Bombardier (Sell) Ba3/BB-/-- BBDBCN XS0552915943 6.125% 15/05/21 Buzzi Unicem (Hold) BZUIM XS0835273235 6.25% 28/09/18 CABB (Hold) CABBCO XS1074935062 FRN 15/06/21 B2/B/-- XS1074935229 5.25% 15/06/21 B2/B/-- 100.9 5.1 492 -0.3 +1.6 +0.6 +2.7 - XS1074935492 6.875% 15/06/22 Caa1/CCC+/-- 92.2 8.6 805 -1.1 -0.1 -0.2 +0.9 - Ba2/BB+/-- 103.9 2.3 209 -0.2 -0.4 +0.7 +0.7 + Celanese (no rec) CE XS1110862148 3.25% 15/10/19 Cemex (no rec) CEMEX 5Y CDS 457 XS0752095686 9.875% 30/04/19 --/B+/BB- XS1028960174 5.25% 01/04/21 --/B+/BB- 101.2 5.1 482 +0.5 +0.7 +1.4 +1.8 - XS1028946348 4.75% 11/01/22 --/B+/BB- 97.3 5.3 489 -0.7 +0.3 +0.2 +1.4 + XS1198002690 4.375% 05/03/23 --/B+/BB- 94.9 5.4 472 +0.7 +1.6 +1.6 +2.6 - B2/B+/BB- 103.9 3.9 377 -0.1 +0.1 +0.8 +1.1 - B1/BB-/-- 78.6 10.4 981 -1.8 +1.5 -0.9 +2.5 - -0.1 +0.1 +0.8 +1.2 + 82 +0.0 +0.0 +0.9 +1.1 + Cerba (no rec) CERBA XS0877607076 7% 01/02/20 Chemours (no rec) CC XS1226296603 6.125% 15/05/23 Ciments Francais (no rec) CMFP 5Y CDS FR0010454090 4.75% 04/04/17 Clariant (Hold) 237 Ba2*+/BB/-- 104.5 1.3 CLNVX 5Y CDS XS0735784851 5.625% 24/01/17 132 76 Ba1/BBB-/-- 105.4 XS1005207961 8.75% 15/12/18 B3/B-/-- 98.5 9.5 931 -2.9 -4.7 -2.0 -3.6 + XS1244815111 7.75% 15/01/21 B3/B-/-- 88.7 10.8 1,044 -1.1 -4.1 -0.2 -3.1 - B2/B/-- 88.1 10.5 1,004 -0.6 -4.6 +0.2 -3.6 + CMA CGM (no rec) 0.8 CMACG CMC di Ravenna (Buy) CMCRAV XS1088811432 7.5% 01/08/21 Constellium (no rec) CSTM XS1064882316 4.625% 15/05/21 B1/B/-- 81.8 9.1 863 -3.9 -4.6 -3.1 -3.6 + XS1151723282 7% 15/01/23 B1/B/-- 86.4 9.8 922 -2.4 -3.2 -1.5 -2.2 - ConvaTec (no rec) CONVAT 5Y CDS XS0568044555 10.875% 15/12/18 165 B3/B/-- 103.1 7.4 584 +0.0 +0.6 +0.9 +1.6 XS1084050316 4% 15/07/22 Ba2/BB/-- 104.1 3.3 287 -0.3 -0.5 +0.5 +0.6 - XS1227287221 3.375% 15/05/25 Ba2/BB/-- 94.5 4.1 329 -0.8 -1.3 +0.0 -0.3 + B2/B/-- 98.4 4.5 462 +0.2 +0.6 +1.1 +1.6 - B3/CCC+/-- 97.9 10.0 973 +0.3 +0.2 +1.2 +1.3 - XS0982711045 6.75% 15/12/19 B1/BB/-- 107.6 2.7 248 +0.1 +0.7 +1.0 +1.8 - XS0982712951 FRN 15/12/19 B1/BB/-- Crown (no rec) CCK Dry Mix Solutions (no rec) DRYMIX XS1076527875 FRN 15/06/21 Eco-Bat Technologies (no rec) ECOBAT XS0754797438 7.75% 15/02/17 Empark (no rec) Rating BEZINC EMPARK Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 22 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument Esterline Technologies (no rec) XS1212668062 3.625% 15/04/23 Faenza (no rec) Rating PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ ESL Ba2/BB+/-- 98.1 4.0 338 +0.2 +2.0 +1.1 +3.1 - Caa1/CCC+/-- 108.2 5.2 496 -0.4 -0.3 +0.5 +0.7 - FAENNZ XS0955817738 8.25% 15/08/21 Finmeccanica (no rec) FNCIM 5Y CDS 166 XS0861828407 4.375% 05/12/17 Ba1/BB+/BB+ 106.4 1.1 114 -0.5 -0.3 +0.4 +0.7 + XS0182242247 5.75% 12/12/18 Ba1/BB+/BB+ 112.7 1.4 140 -0.4 +0.0 +0.5 +1.1 + XS0999654873 4.5% 19/01/21 Ba1/BB+/BB+ 110.9 2.2 196 -0.9 +0.2 +0.0 +1.2 + XS0458887030 5.25% 21/01/22 Ba1/BB+/BB+ 115.2 2.6 216 -0.6 +0.6 +0.3 +1.7 + XS0215093534 4.875% 24/03/25 Ba1/BB+/BB+ 113.0 3.3 247 -0.9 +0.5 +0.0 +1.5 + FMC (Hold) FMEGR 5Y CDS 75 XS0675221419 6.5% 15/09/18 Ba2/BB+/BB 115.1 0.9 96 +0.0 +0.6 +0.9 +1.7 + XS0723509104 5.25% 31/07/19 Ba2/BB+/BB 114.1 1.3 120 +0.0 +0.4 +0.9 +1.4 + XS0576395478 5.25% 15/02/21 Ba2/BB+/-- 116.8 1.9 158 +0.2 +0.6 +1.1 +1.7 + Fresenius (Hold) FREGR 5Y CDS 74 XS1013954646 2.375% 01/02/19 Baa3/BB+/BB+ 105.3 0.7 63 +0.0 +0.5 +0.9 +1.6 + XS0759200321 4.25% 15/04/19 Baa3/BB+/BB+ 111.9 0.7 61 +0.1 +1.2 +1.0 +2.3 + XS0873432511 2.875% 15/07/20 Baa3/BB+/BB+ 107.3 1.3 104 -0.2 +0.9 +0.7 +2.0 + XS1013955379 3% 01/02/21 Baa3/BB+/BB+ 108.0 1.4 111 +0.0 +1.3 +0.9 +2.3 + XS1026109204 4% 01/02/24 Baa3/BB+/BB+ 113.9 2.3 149 -0.1 +1.3 +0.7 +2.3 + Caa2/B/-- 75.4 11.2 1,069 -2.9 -6.6 -2.0 -5.5 - B2/B/-- 103.5 2.8 83 +0.1 +0.6 +1.0 +1.6 - Ba3/BB-/-- 116.8 4.0 371 +0.0 +0.1 +0.9 +1.2 - B3/CCC+/-- 104.5 4.1 314 -0.1 +0.4 +0.7 +1.5 - Gates Global (no rec) GATGLO XS1078819726 5.75% 15/07/22 GCS (no rec) GCLSYS XS0992167436 6.5% 15/11/18 Greif (no rec) GEF XS0647108264 7.375% 15/07/21 Guala Closures (Hold) GCLIM XS0619675753 9.375% 15/04/18 XS0852482941 FRN 15/11/19 Haniel (Hold) B1/B/-- HANIEL 5Y CDS 123 XS0482703286 5.875% 01/02/17 Ba1/BB+/-- 105.7 0.8 90 +0.0 +0.0 +0.8 +1.1 + XS0743603358 6.25% 08/02/18 Ba1/BB+/-- 111.3 1.0 100 +0.0 +0.1 +0.9 +1.2 + XS0974356262 7.75% 01/10/18 Caa1/B-/-- 103.4 5.9 568 -0.3 -0.3 +0.6 +0.8 + XS1144214993 7.5% 15/10/19 Caa1/B-/-- 104.3 6.1 585 -0.1 +0.2 +0.8 +1.2 + Caa3/CCC-/-- 91.1 14.2 1,396 +0.2 +14.8 +1.1 +15.8 + Hapag-Lloyd (no rec) Heckler & Koch (no rec) HPLGR HECKKO XS0626438112 9.5% 15/05/18 HeidelbergCement (Hold) HEIGR 5Y CDS XS0458230322 8% 31/01/17 139 Ba1/--/BB+ 108.1 0.9 90 -0.1 +0.0 +0.8 +1.0 + DE000A0TKUU3 5.625% 04/01/18 Ba1/--/BB+ 109.5 1.0 102 -0.1 +0.2 +0.8 +1.2 + XS0686703736 9.5% 15/12/18 Ba1/--/BB+ 124.0 1.4 135 -0.2 +0.2 +0.7 +1.3 + XS1044496203 2.25% 12/03/19 Ba1/--/BB+ 103.3 1.3 119 -0.1 +0.0 +0.8 +1.0 + XS0458685913 8.5% 31/10/19 Ba1/--/BB+ 125.6 1.7 157 -0.3 +0.3 +0.6 +1.3 + XS0478803355 7.5% 03/04/20 Ba1/--/BB+ 123.7 1.8 162 -0.4 +0.0 +0.5 +1.0 + XS0985874543 3.25% 21/10/20 Ba1/--/BB+ 107.0 1.8 152 -0.3 +0.0 +0.6 +1.1 + XS1002933072 3.25% 21/10/21 Ba1/--/BB+ 107.1 2.0 161 -0.3 +0.5 +0.6 +1.5 + Caa1/CCC+/-- 101.7 7.6 739 +0.0 -1.0 +0.9 +0.1 + B2/B/-- 106.4 4.9 471 -0.1 +1.4 +0.8 +2.4 + XS1265903937 5.125% 01/08/22 B1/B+/-- 104.2 4.2 392 -0.1 +0.5 +0.8 +1.6 + XS1265973047 7.25% 01/08/23 B3/B-/-- 105.0 6.1 582 -0.2 +1.2 +0.6 +2.2 + Heidelberger Druck (no rec) HDDGR DE000A14J7A9 8% 15/05/22 HomeVi (no rec) DMVIFR XS1093814116 6.875% 15/08/21 Horizon Holdings (no rec) VERALL Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 23 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument Huntsman (no rec) Rating PX Yield HUN 5Y CDS Spd TR 1w TR 1m ER 1w ER 1m LQ 451 XS1056202762 5.125% 15/04/21 B1/B/-- 97.6 5.7 538 -1.3 +0.5 -0.4 +1.5 - XS1207638732 4.25% 01/04/25 B1/B/-- 87.9 6.1 520 -0.9 +0.4 +0.0 +1.5 - B2/B/-- 106.7 5.7 558 +0.0 +1.1 +0.9 +2.2 - B2/B+/-- 98.9 4.3 378 +0.0 +1.1 +0.8 +2.2 + Hurtigruten (no rec) HRGNO XS1180324037 7.5% 01/02/22 IMS Health (no rec) RX XS1207120475 4.125% 01/04/23 Ineos (Buy) INEGRP 5Y CDS 104 XS0928189777 6.5% 15/08/18 B3/B-/-- 102.1 5.1 492 +0.0 +0.3 +0.9 +1.4 XS0982710740 5.75% 15/02/19 B3/B-/-- 101.4 5.1 507 -0.1 +0.1 +0.8 +1.2 + Ba3/BB-/-- 97.1 4.5 392 -0.7 +0.4 +0.2 +1.4 + --/B/B*- 28.4 41.5 4,016 -7.0 -43.1 -6.1 -42.0 + Ba3/B+/-- 103.6 2.8 217 -0.2 -0.1 +0.7 +1.0 + B3/B-/-- 106.7 3.0 280 -0.1 +0.8 +0.8 +1.8 + XS1117296209 4% 01/05/23 Innovia Films (no rec) INNOGB XS1032974609 FRN 31/03/20 Isolux (no rec) B2/B/-- ISOLUX XS1046702293 6.625% 15/04/21 ista (Hold) ISTAGR XS0929666070 5% 30/04/20 XS0929660974 6.875% 30/04/21 (SUB) Italcementi (Buy) ITCIT XS0893201433 6.125% 21/02/18 Ba3*+/BB/-- 109.9 1.6 155 -0.1 -0.1 +0.8 +0.9 - XS0496716282 6.625% 19/03/20 Ba3*+/BB/-- 117.6 2.3 212 -0.3 -1.0 +0.6 +0.0 + Caa1*+/B-/-- 101.1 3.4 266 +0.0 +0.2 +0.9 +1.2 + XS1040428721 5.75% 01/03/21 B2/B+/-- 103.0 4.8 471 +0.3 +4.6 +1.2 +5.6 - XS1040429455 FRN 01/03/21 B2/B+/-Ba2/BB+/-- 104.2 1.2 240 -0.1 +0.1 +0.8 +1.1 + Caa1/CCC+/-- 103.7 6.0 586 -0.2 -0.2 +0.7 +0.8 + Caa1/CCC+/-- 103.7 6.0 586 -0.2 -0.2 +0.7 +0.8 + B1/B/-- 106.8 6.1 457 -0.3 +0.6 +0.6 +1.7 + Kerling (Hold) KERLIN XS0480857415 10.625% 01/02/17 Kerneos (no rec) KERNOS Kion (Hold) KIONGR XS0889217716 6.75% 15/02/20 Klöckner Pentaplast (no rec) KPERST XS1222584325 7.125% 01/11/20 KP Germany Erste (no rec) KPERST XS1222584325 7.125% 01/11/20 KraussMaffei (no rec) KRAUSS XS0864385264 8.75% 15/12/20 Labco (no rec) LABFP XS1117292984 6.25% 01/07/22 B2/B+/B+ 105.1 5.0 482 -0.9 +0.2 +0.0 +1.3 XS1117292802 FRN 01/07/22 B2/B+/B+ 100.7 4.8 489 -0.1 -0.6 +0.8 +0.5 - Caa1/B-/CCC+ 102.9 7.7 731 -0.4 +0.2 +0.5 +1.3 - XS1268471494 8.25% 01/07/23 Lecta (Hold) LECTA XS0780141999 FRN 15/05/18 B2/B/-- XS0780068036 8.875% 15/05/19 B2/B/-- 106.3 4.6 428 -0.2 -0.3 +0.6 +0.8 - --/BB-/-- 104.2 3.7 356 +0.1 +1.0 +1.0 +2.0 + --/B/-- 103.1 6.3 603 -0.3 -0.1 +0.6 +0.9 - B2/B/-- 105.7 6.4 614 +0.0 +0.7 +0.9 +1.8 - B2/--/B 93.9 7.2 683 -0.4 -2.1 +0.5 -1.0 + B2/B*-/-- 83.4 13.5 1,324 -4.6 -7.3 -3.7 -6.3 + B2/B/-- 107.0 3.3 284 +0.0 +0.2 +0.9 +1.3 + Ba2/BB/-- 108.0 1.5 144 -0.1 +0.9 +0.7 +1.9 + Loxam (no rec) LOXAM XS1089828450 4.875% 23/07/21 XS1089828880 7% 23/07/22 LSF9 Balta Issuer (no rec) BALTAL XS1265917481 7.75% 15/09/22 Maccaferri (no rec) OFFMAC XS1074596344 5.75% 01/06/21 Manutencoop (Hold) MANTEN XS0808635352 8.5% 01/08/20 Medi-Partenaires (no rec) MEDIFP XS0924046682 7% 15/05/20 Metsä Board (no rec) METSA FI4000085550 4% 13/03/19 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 24 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument New World Resources (no rec) XS1107303148 8% 07/04/20 (PIK) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ Caa2/CCC/-- 20.5 44.2 5,703 -29.8 -47.3 -28.9 -46.2 - FR0010465427 5.75% 02/05/17 --/BB-/-- 105.7 1.9 166 -0.1 +0.4 +0.8 +1.4 + FR0011376201 4.25% 19/03/18 --/BB-/-- 105.1 2.0 198 -0.1 +0.6 +0.8 +1.7 - Nexans (no rec) NEXFP Norske Skog (no rec) NSINO 5Y CDS XS0307552355 7% 26/06/17 5,324 Ca/C*-/-- 50.3 67.0 6,811 -5.1 -12.6 -4.2 -11.6 - Caa1/CC*-/-- 77.7 20.2 2,009 -1.0 -8.3 -0.1 -7.3 - Caa3/C*-/-- 31.2 38.9 4,132 -15.0 -17.0 -14.1 -15.9 - B2/B/-- 100.7 3.5 362 -0.1 +0.3 +0.8 +1.4 - XS1028951421 FRN 30/06/20 B2/BB-/-- 85.3 7.7 785 -0.3 +0.7 +0.6 +1.8 - XS1028950886 4.5% 30/06/21 B2/BB-/-- 87.0 7.5 708 -0.6 +3.2 +0.3 +4.2 - B3/B-*+/-- 83.9 14.3 1,408 -2.8 -3.6 -1.9 -2.5 + Caa1/CCC/CCC+*+ 108.9 4.3 412 +0.0 +0.5 +0.9 +1.6 - XS0760705631 7.625% 15/03/20 B1/--/BB- 103.6 5.7 303 -0.4 -1.0 +0.5 +0.0 + XS1043961439 4.75% 15/03/22 B1/--/BB- 88.3 7.1 671 -2.5 -4.8 -1.6 -3.8 + XS1206510569 5.5% 15/03/23 B1/--/BB- 89.8 7.4 682 -1.7 -3.4 -0.9 -2.3 - B3/B/-- 75.1 16.4 1,608 -0.8 -10.3 +0.1 -9.2 - XS1181663292 11.75% 15/12/19 XS1193909154 8% 24/02/21 Novacap (no rec) NOVAFR XS1065165455 FRN 01/05/19 Novafives (no rec) NVFVES Nyrstar (no rec) NYRBB XS1107268135 8.5% 15/09/19 Oberthur Technologies (no rec) OCSFP XS0979448494 9.25% 30/04/20 Obrascon (no rec) OHLSM Ovako (no rec) OVAKOA XS1028954367 6.5% 01/06/19 Owens-Illinois (no rec) OI 5Y CDS 103 XS0542593792 6.75% 15/09/20 Ba3/BB/-- 117.3 2.9 265 -0.2 +0.2 +0.7 +1.3 + XS0908230781 4.875% 31/03/21 (SUB) Ba3/BB/-- 109.6 3.0 264 +0.0 +1.4 +0.8 +2.4 + XS1207101418 5.25% 01/04/22 B1/B+/-- 100.3 5.2 490 -0.3 -0.8 +0.6 +0.2 - XS1207105161 7.375% 01/04/23 B2/B-/-- 98.8 7.7 709 -0.1 -1.0 +0.8 +0.1 - Paprec (no rec) PAPREC Paroc (no rec) PAROCG XS1028955505 6.25% 15/05/20 B2/B/-- 97.0 7.2 689 -0.1 +0.1 +0.8 +1.1 - XS1028955174 FRN 15/05/20 B2/B/-- 95.2 6.5 658 +0.1 -0.6 +1.0 +0.4 - B2/CCC+/-- 101.8 5.6 474 -0.3 -0.4 +0.6 +0.6 - B3*+/CCC+/-- 105.1 5.9 566 +0.3 +1.4 +1.2 +2.5 + XS0935786789 3.125% 27/05/20 --/BB+/BB 104.9 2.0 180 +0.3 XS1091770161 3.625% 30/07/21 --/BB+/BB 106.1 2.5 213 -0.3 +1.3 +0.6 +2.3 + Ba3/BB/-- 105.1 3.3 270 -0.3 +0.1 +0.6 +1.2 - XS1063837311 4.75% 01/05/17 --/CCC-/-- 92.5 11.3 1,076 +0.2 -1.1 +1.1 +0.0 - XS1063837741 5.5% 01/05/19 --/CCC-/-- 85.9 10.3 1,052 -1.7 -3.7 -0.8 -2.7 - DE000A161GC3 5.125% 01/05/22 B1/B+/-- 105.6 3.7 360 -0.2 +0.4 +0.6 +1.4 + DE000A161GE9 FRN 01/05/22 B1/B+/-- 100.5 4.1 417 -0.2 -0.3 +0.6 +0.7 - Caa1/B+/-- 86.9 8.5 799 -2.2 +1.3 -1.3 +2.3 - B2/B+/-- 75.3 15.9 1,549 +0.3 +4.0 +1.2 +5.0 - -0.4 -6.6 +0.5 -5.5 - Perstorp (no rec) PERHOL XS0855179536 9% 15/05/17 Pfleiderer (no rec) PFLEID DE000A12T176 7.875% 01/08/19 Phoenix (Hold) PHARGR Portucel (no rec) +1.2 - PTIPL PTPTIHOT0014 5.375% 15/05/20 PPC (no rec) PPCGA Progroup (no rec) PROGRP PSPC Escrow (no rec) PAH XS1175224747 6% 01/02/23 Rain Commodities (no rec) RCOLIN XS0867945197 8.5% 15/01/21 Rexam (Hold) Rating NWRLN REXLN 5Y CDS XS0307868744 6.75% 29/06/67 (SUB) 51 Ba2*-/BB/-- 101.4 5.9 582 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 25 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument Rexel (no rec) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ XS0908821639 5.125% 15/06/20 Ba3/BB/BB 105.5 2.3 188 -0.2 +0.2 +0.7 +1.3 - XS1238996018 3.25% 15/06/22 Ba3/BB/BB 99.6 3.3 301 -0.3 +1.8 +0.6 +2.8 + Ba1/--/-- 107.2 1.2 118 +0.0 +0.0 +0.9 +1.1 + --/BB+/BB 110.1 2.2 216 -0.2 +0.3 +0.7 +1.4 - Ba2/BB/-- 97.3 3.9 344 -1.5 +1.2 -0.6 +2.3 + B2/B+/-- 94.8 11.8 1,171 -2.0 -6.6 -1.1 -5.5 + B1/BB/-- 104.5 3.9 326 -0.5 +0.8 +0.4 +1.9 - B2/B+/-- 103.6 5.6 540 -0.7 +1.8 +0.2 +2.8 - --/B/B- 102.7 4.5 444 +0.0 +0.5 +0.9 +1.6 + B1/BB-/-- 100.9 4.7 441 -0.3 +1.1 +0.6 +2.2 + Caa1/B-/-- 106.0 6.2 598 -0.4 +0.2 +0.5 +1.3 + Rheinmetall (Hold) RHMGR 5Y CDS XS0542369219 5.25% 22/09/17 Salini Impregilo (no rec) 154 IPGIM XS0956262892 6.125% 01/08/18 Sappi (Buy) SAPSJ XS1117298676 3.375% 01/04/22 Schmolz & Bickenbach (Hold) STLNSW DE000A1G4PS9 9.875% 15/05/19 Sealed Air Corporation (no rec) SEE XS1247796185 4.5% 15/09/23 Senvion (no rec) SENVIO XS1223808749 6.625% 15/11/20 SGD Group (no rec) GOBAIN XS1028957469 5.625% 15/05/19 SGL (no rec) SGLGR XS1002933403 4.875% 15/01/21 SIG Combibloc (no rec) SIGCBL XS1176586862 7.75% 15/02/23 Smurfit Kappa (Hold) SKGID 5Y CDS 155 XS0828002807 5.125% 15/09/18 Ba1/BB+/BB+ 109.3 1.5 137 -0.1 +0.0 +0.8 +1.1 - XS0880132989 4.125% 30/01/20 Ba1/BB+/BB+ 109.5 1.8 160 -0.1 +0.0 +0.8 +1.0 + XS0832432446 FRN 15/10/20 Ba1/BB+/BB+ 107.7 1.8 192 -0.3 +0.0 +0.6 +1.1 - XS1074396927 3.25% 01/06/21 Ba1/BB+/BB+ 106.0 2.1 178 -0.6 +0.1 +0.3 +1.2 + XS1117298759 2.75% 01/02/25 Ba1/BB+/BB+ 98.0 3.0 222 -0.9 -1.1 +0.0 +0.0 - --/BB+/-- 96.9 3.4 277 -0.5 +1.7 +0.4 +2.8 + --/BB-/-- 98.9 4.3 420 -0.8 -0.4 +0.1 +0.7 - SPCM (no rec) SNFF XS1221105759 2.875% 15/06/23 SSAB (no rec) SSABAS XS1055515412 3.875% 10/04/19 Stena (no rec) STENA 5Y CDS 540 XS0285176458 6.125% 01/02/17 B2/BB/-- 103.6 3.2 296 -0.1 +0.0 +0.8 +1.1 + XS0495219874 7.875% 15/03/20 B2/BB/-- 112.1 4.9 458 +0.0 +0.1 +0.9 +1.2 + Stora Enso (Hold) STERV 5Y CDS 124 XS0830688411 5% 19/03/18 Ba2/BB/-- 108.5 1.3 120 +0.0 +0.1 +0.9 +1.1 + XS0754290459 5.5% 07/03/19 Ba2/BB/-- 112.5 1.6 149 +0.0 +0.5 +0.9 +1.5 + Ba2/BB/-- 103.0 3.7 310 +2.5 +4.4 +3.4 +5.4 - Synthos (no rec) SNSPW XS1115183359 4% 30/09/21 Techem (Hold) TCHEN 5Y CDS 168 XS0783934911 6.125% 01/10/19 Ba3/BB-/BB 105.6 XS0783934838 7.875% 01/10/20 B3/B/B 108.9 2.0 +0.1 +0.6 +1.0 +1.6 - +0.0 +0.7 +0.9 +1.8 + DE000A1MA9H4 4.375% 28/02/17 Ba1/BB/BB+ 104.1 1.1 DE000A1R08U3 4% 27/08/18 Ba1/BB/BB+ 106.4 1.6 106 +0.0 +0.1 +0.9 +1.2 + 158 +0.0 +0.2 +0.9 +1.3 DE000A1R0410 3.125% 25/10/19 Ba1/BB/BB+ 104.2 + 2.0 184 -0.1 +0.0 +0.8 +1.0 DE000A14J579 1.75% 25/11/20 Ba1/BB/BB+ + 98.4 2.1 185 -0.3 +0.0 +0.6 +1.1 DE000A14J587 2.5% 25/02/25 + Ba1/BB/BB+ 95.8 3.1 223 -0.5 +0.4 +0.4 +1.5 + XS0862274445 8.75% 19/01/17 --/BB/-- 106.1 3.6 319 +0.0 +0.7 +0.9 +1.8 - XS1086071146 4.25% 10/07/19 --/BB/-- 98.5 4.8 463 -0.6 +0.6 +0.3 +1.7 - 107.5 4.7 51 +0.2 +1.2 +1.0 +2.3 - ThyssenKrupp (Hold) Titan Cement (no rec) TMF Group (Hold) Rating RXLFP TKAGR 5Y CDS 168 257 TITKGA TMFG XS0860995355 FRN 01/12/18 XS0860984235 9.875% 01/12/19 B1/B/-Caa1/CCC+/-- Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 26 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec IDU Name Instrument Trinseo (no rec) XS1220246521 6.375% 01/05/22 Unilabs (no rec) XS0943769041 12% 15/01/19 (PIK) Valeant (no rec) XS1205619288 4.5% 15/05/23 TR 1m ER 1w ER 1m LQ B3/--/-- 101.0 6.1 599 -0.9 -0.1 +0.0 +1.0 - B3/B/-- 104.5 +0.4 +0.3 +1.3 +1.4 - Caa2/CCC+/-- 105.5 12.9 1,280 +0.5 +0.9 +1.3 +2.0 - B1/B-/-- 83.7 7.5 685 -1.4 +2.4 -0.5 +3.4 - FR0011149947 4.25% 14/02/17 --/BB+/-- 99.6 5.0 462 -0.4 -0.6 +0.5 +0.4 + FR0011302793 3.25% 02/08/19 --/BB+/-- 84.1 8.8 844 -1.9 -3.4 -1.0 -2.3 + FR0012188456 2.25% 30/09/24 --/BB+/-- 64.5 8.0 728 -4.1 -4.7 -3.2 -3.7 + B1/--/-- 104.9 4.9 465 VERISR XS1310477895 6% 01/11/22 Voith (Hold) VOITGR 5Y CDS XS0306488627 5.375% 21/06/17 VWR (no rec) - 129 Ba1/--/-- 105.5 1.8 177 +0.0 +0.0 +0.9 +1.0 + B3/B+/-- 98.2 5.0 455 +0.2 +1.3 +1.1 +2.4 - Caa2/--/CCC 45.0 39.0 3,942 -2.0 -18.2 -1.1 -17.2 - B2/B/-- 105.9 8.0 776 -0.2 +2.3 +0.7 +3.4 - VWRINT XS1207387801 4.625% 15/04/22 Waste Italia (no rec) WASTEI XS1139056037 10.5% 15/11/19 WFS Global (no rec) WFSGLB XS1252776759 9.5% 15/07/22 Wienerberger (Hold) WIEAV 5Y CDS DE000A0G4X39 6.5% PERP (SUB) 377 B1/--/-- 101.9 4.8 485 -0.5 +0.2 +0.4 +1.3 + AT0000A100E2 4% 17/04/20 Ba2/--/-- 107.4 2.3 205 -0.1 +0.6 +0.8 +1.6 + DE000A1ZN206 6.5% PERP (SUB) B1/--/-- 102.1 4.9 463 +0.1 +0.2 +1.0 +1.3 - Caa1/CCC+/-- 99.6 8.9 816 -0.2 +1.6 +0.7 +2.6 - Ba2/BB/-- 102.4 3.4 287 -0.4 +1.4 +0.5 +2.4 - B2/B-/-- 95.4 6.8 646 -0.9 -0.3 -0.1 +0.8 - B3/CC/-- 96.2 10.2 977 -0.6 +1.2 +0.2 +2.3 - XS0864611610 8% 15/12/19 (SUB) B1/BB-/-- 104.2 5.6 442 +0.1 +0.3 +1.0 +1.4 - XS1003905152 6.5% 15/01/22 B1/BB-/-- 106.5 4.7 460 -0.4 +0.7 +0.5 +1.7 + Wittur (no rec) WITTUR XS1188024548 8.5% 15/02/23 Worldpay Group (no rec) WPGLN XS1319701451 3.75% 15/11/22 Xella (Hold) XELLA XS1071440991 FRN 01/06/19 XPO Logistics (no rec) B1/B+/-- XPO XS1117295060 5.75% 15/06/21 Yioula (no rec) YIOULA XS1069662812 8.5% 15/05/19 Altice (Buy) ALTICE XS1061642317 7.25% 15/05/22 B3/B/-- 95.4 8.2 779 -2.5 -2.3 -1.6 -1.2 + XS1181246775 5.25% 15/02/23 B1/BB-/-- 101.1 5.1 475 -1.2 -0.6 -0.3 +0.5 + XS0946155693 9% 15/06/23 B3/B-/-- 113.3 5.1 502 -0.5 +0.1 +0.4 +1.1 - XS1117300241 6.25% 15/02/25 B3/B/-- 86.6 8.4 766 -1.8 -2.6 -0.9 -1.5 - --/BB-/-- 106.6 2.2 162 +0.2 +0.2 +1.1 +1.3 - --/BB+/BBB- 95.9 3.9 338 -0.3 -2.4 +0.6 -1.4 + B3/B/B+ 107.5 2.4 243 -0.3 +0.3 +0.6 +1.4 - B1/B+/-- 105.6 5.7 564 -1.5 -0.6 -0.6 +0.5 - B2/BB-/-- 106.3 3.5 289 -0.3 +0.4 +0.6 +1.4 - Bite Finance (no rec) BITEF XS0883689753 FRN 15/02/18 Cegedim (no rec) B3/B/B- CGMFP XS0906984272 6.75% 01/04/20 Cellnex Telecom (no rec) CLNXSM XS1265778933 3.125% 27/07/22 EIRCMF XS0927671080 9.25% 15/05/20 INTERO XS1298004612 7.375% 15/10/20 InterXion (no rec) TR 1w VKFP Verisure (no rec) Interoute (no rec) Spd VRXCN Vallourec (no rec) Eircom (no rec) PX Yield UNILAB XS0943769470 8.5% 15/07/18 TMT Rating TRINSE INXN XS0946728564 6% 15/07/20 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 27 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec TMT Name Instrument KPN (Hold) Rating PX Yield KPN 5Y CDS XS0903872355 6.125% PERP (SUB) Spd TR 1w TR 1m ER 1w ER 1m LQ 76 Ba2/BB/BB 106.8 3.6 351 -0.1 +0.8 +0.8 +1.8 + Caa1/--/-- 91.9 7.5 696 -0.1 -2.1 +0.8 -1.1 - XS1219467930 FRN 01/05/22 B2/B/-- 94.1 4.9 499 -0.2 -0.1 +0.7 +1.0 - XS1219465728 3.875% 01/05/22 B2/B/-- 93.2 5.2 472 -0.6 -0.5 +0.2 +0.6 - XS1219475792 4.875% 01/05/23 Caa1/CCC+/-- 86.5 7.3 673 -0.9 -0.5 +0.0 +0.6 - Lawson Software (no rec) LWSN XS1207004729 5.75% 15/05/22 Matterhorn Mobile (Sell) Nokia (Hold) MATTER NOKIA 5Y CDS XS0411735482 6.75% 04/02/19 118 Ba2/BB+/BB 116.8 1.3 126 +0.1 +0.5 +1.0 +1.6 + XS1028956222 5.375% 15/05/22 B1/B+/-- 103.5 4.6 433 -0.9 +0.5 +0.0 +1.6 + XS1028956149 5.625% 15/05/24 B1/B+/-- 102.7 5.2 472 -1.1 +1.0 -0.2 +2.0 + XS0215828913 4.375% 24/03/17 B1/BB+/BB 70.7 38.4 3,683 -10.6 -23.6 -9.7 -22.6 + XS0441479804 5.242% 06/11/17 B1/BB+/BB 73.5 31.9 2,438 -3.3 -14.9 -2.4 -13.8 - XS0569301327 5.125% 15/12/17 Ba3/BB+/BB 59.9 36.6 3,677 -10.6 -30.1 -9.8 -29.0 + Numericable-SFR (Buy) Oi (Hold) NUMFP OIBRBZ XS0843939918 5.875% 17/04/18 B1/BB+/BB 54.0 39.3 3,908 -13.4 -36.4 -12.5 -35.3 + XS0462994343 5% 04/11/19 B1/BB+/BB 61.3 20.6 2,020 -13.7 -30.3 -12.8 -29.3 + XS0927581842 4.625% 08/05/20 B1/BB+/BB 50.9 24.0 2,352 -8.6 -32.6 -7.7 -31.6 - XS1245244402 5.625% 22/06/21 Ba2/BB+/BB 46.7 23.8 2,367 -12.2 -36.2 -11.4 -35.2 - XS0221854200 4.5% 16/06/25 B1/BB+/BB 46.0 16.3 1,511 -19.8 -38.3 -18.9 -37.3 + XS0885718782 7.875% 07/02/18 Caa2/B+/-- 107.6 4.3 421 -0.1 -0.1 +0.8 +1.0 XS1327539976 4.375% 02/12/19 Caa2/B+/-- 100.6 4.2 409 XS1086785182 3.5% 09/07/20 Caa2/B+/-- 95.9 4.6 433 -1.0 -1.2 -0.1 -0.2 + B3/--/B 71.1 24.5 2,546 -4.9 -10.9 -4.0 -9.8 - OTE Hellenic Telecom (Hold) PagesJaunes (no rec) HTOGA 5Y CDS + PAJFP XS0626691447 8.875% 01/06/18 PLAY (no rec) 324 PFOURS XS0982710153 5.25% 01/02/19 B1/B/-- 102.8 3.9 277 -0.2 +0.0 +0.7 +1.0 + XS0982709494 6.5% 01/08/19 B2/CCC+/B- 104.9 3.9 382 -0.2 +0.5 +0.7 +1.5 + Caa1/CCC+/-- 102.8 5.1 390 -0.2 +0.3 +0.7 +1.4 - +0.5 +0.4 +1.4 +1.4 - -0.5 +0.8 +0.4 +1.9 - XS1028947403 7.75% 28/02/20 (PIK) Polkomtel (no rec) POLKOM 5Y CDS XS0731129747 11.75% 31/01/20 55 B2/BB-/-- 107.8 B1/B+/-- 107.1 3.8 357 XS0918548644 4.625% 15/04/20 Ba1/BB+/-- 106.8 3.0 279 -0.1 +0.9 +0.8 +2.0 - XS1266662763 4% 30/07/22 Ba1/BB+/-- 102.3 3.6 317 -0.3 +0.4 +0.6 +1.5 + RCS & RDS (Hold) CBLCSY XS0954673777 7.5% 01/11/20 SOFTBANK (no rec) SOFTBK XS1266662334 4.75% 30/07/25 Ba1/BB+/-- 98.9 4.9 411 +0.0 -0.9 +0.9 +0.2 + XS1266661013 5.25% 30/07/27 Ba1/BB+/-- 98.6 5.4 445 -0.2 -0.6 +0.7 +0.5 + TDC (Buy) TDCDC 5Y CDS XS1195581159 3.5% 26/02/15 (SUB) TeamSystem (Hold) 122 Ba2/BB/BB+ 94.7 4.7 440 -0.3 +1.0 +0.6 +2.0 + B2/B-/-- 104.9 3.4 338 -0.5 +0.2 +0.4 +1.3 + TITANL XS0808638372 7.375% 15/05/20 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 28 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec TMT Name Instrument Telecom Italia (Hold) Rating PX Yield TITIM 5Y CDS Spd TR 1w TR 1m ER 1w ER 1m LQ 149 XS0693940511 7% 20/01/17 Ba1/BB+/BBB- 107.2 0.5 52 +0.0 -0.1 +0.9 +1.0 + XS0831389985 4.5% 20/09/17 Ba1/BB+/BBB- 106.7 0.7 73 -0.1 -0.1 +0.8 +1.0 + XS0630463965 4.75% 25/05/18 --/BB+/BBB- 109.5 0.9 86 -0.1 -0.2 +0.8 +0.8 + XS0794393396 6.125% 14/12/18 --/BB+/BBB- 114.6 1.2 116 +0.0 +0.1 +0.9 +1.2 + XS0184373925 5.375% 29/01/19 --/BB+/BBB- 113.0 1.2 112 +0.0 -0.1 +0.9 +0.9 + XS0868458653 4% 21/01/20 --/BB+/BBB- 110.0 1.5 135 +0.1 -0.1 +1.0 +1.0 + XS0974375130 4.875% 25/09/20 --/BB+/BBB- 114.2 1.8 155 -0.1 +0.4 +0.8 +1.5 + XS1020952435 4.5% 25/01/21 --/BB+/BBB- 112.4 1.9 168 +0.0 -0.2 +0.8 +0.9 + + XS0486101024 5.25% 10/02/22 --/BB+/BBB- 115.8 2.5 208 +0.1 -0.4 +1.0 +0.6 XS1169832810 3.25% 16/01/23 Ba1/BB+/BBB- 103.1 2.8 224 -0.4 -0.8 +0.5 +0.3 - XS0161100515 7.75% 24/01/33 Ba1/BB+/BBB- 132.5 4.9 368 -1.2 -0.4 -0.4 +0.7 + XS0214965963 5.25% 17/03/55 Ba1/BB+/BBB- 102.3 5.1 369 -0.6 -0.3 +0.3 +0.7 + Telefonica (Hold) TELEFO 5Y CDS 105 XS0972570351 6.5% PERP (SUB) Ba1/BB+/BBB- 106.6 4.0 395 -0.7 +1.0 +0.2 +2.1 - XS1148359356 4.2% PERP (SUB) Ba1/BB+/BBB- 99.8 4.3 413 -1.1 -1.0 -0.3 +0.0 + XS1050460739 5% PERP (SUB) Ba1/BB+/BBB- 102.2 4.5 428 -1.0 -0.2 -0.1 +0.9 + XS0972588643 7.625% PERP (SUB) Ba1/BB+/BBB- 112.4 5.1 477 -0.4 +1.6 +0.5 +2.6 - XS1050461034 5.875% PERP (SUB) Ba1/BB+/BBB- 102.6 5.5 482 -1.0 -0.2 -0.1 +0.9 + Ba1/BB+/-- 104.5 3.4 343 -0.2 +0.3 +0.7 +1.4 + XS0592445075 6.625% 15/02/21 B1/B+/BB 104.1 2.9 219 -0.1 +0.1 +0.8 +1.1 + XS0615238390 FRN 15/06/21 B1/B+/BB 100.4 3.3 342 +0.1 +0.6 +1.0 +1.6 - XS0783935488 6.25% 15/08/22 B1/B+/BB 108.1 3.2 313 -0.7 -0.2 +0.2 +0.8 - XS0783935306 6.75% 15/08/24 B1/B+/BB 110.5 3.9 380 -0.2 +0.5 +0.7 +1.6 - XS1266726592 4.875% 15/07/27 B1/B+/-- 97.0 5.2 425 -0.7 +0.3 +0.2 +1.3 - Ba2/BBB/-- 108.4 2.7 262 +0.0 +0.4 +0.8 +1.5 - B2/B/-- 107.2 4.5 419 -0.1 +0.6 +0.8 +1.6 - XS0827991760 5.5% 15/09/22 Ba3/BB-/-- 106.6 3.2 321 -0.5 +0.0 +0.4 +1.0 + XS0862322947 5.75% 15/01/23 Ba3/BB-/-- 106.8 3.7 371 -0.6 -0.1 +0.3 +0.9 + XS0877974062 5.125% 21/01/23 Ba3/BB-/BB- 106.1 3.4 334 -0.3 +0.3 +0.6 +1.3 - XS0918739318 5.625% 15/04/23 Ba3/BB-/-- 107.1 3.7 365 -0.3 +0.3 +0.6 +1.3 - Ba3/BB-/BB- 97.5 4.4 359 -2.7 -2.2 -1.8 -1.2 + XS1197205591 3.5% 15/01/27 Ba3/BB-/-- 91.7 4.5 350 -3.2 -3.3 -2.3 -2.2 + XS1199438174 3.75% 15/01/27 B3/B/-- 86.4 5.4 445 -2.0 -2.5 -1.1 -1.5 + XS0982713330 6.25% 15/01/29 Ba3/BB-/-- 110.7 4.5 419 -0.4 +0.3 +0.5 +1.4 + XS0832993397 6.375% 15/09/22 (SUB) B2/B/-- 106.8 4.3 416 -0.1 -0.5 +0.8 +0.5 - XS0909769407 6.75% 15/03/23 B2/B/-- 108.9 4.2 408 -0.2 -0.7 +0.7 +0.3 - Ba3/BB/-- 94.3 4.7 371 -0.9 -0.8 +0.0 +0.3 - Telekom Austria (Hold) TKAAV 5Y CDS XS0877720986 5.625% PERP (SUB) Telenet (Hold) 66 TNETBB TVN (no rec) TVNPW XS0954674668 7.375% 15/12/20 United Group (Hold) ADRBID XS0992294388 7.875% 15/11/20 Unitymedia (Hold) UNITY XS1150437579 4% 15/01/25 UPC (Hold) UPCB 5Y CDS XS1117297603 4% 15/01/27 Virgin Media (Buy) 269 VMED 5Y CDS XS1169920193 4.5% 15/01/25 Vivacom (no rec) 249 B2/B/B 96.3 5.0 426 -1.0 +0.4 -0.1 +1.4 + B1/B-*-/-- 101.2 5.9 600 -0.1 +1.4 +0.8 +2.4 - B1/B/-- 101.8 5.3 559 -1.0 +0.4 -0.1 +1.5 - BLTEBG XS0994993037 6.625% 15/11/18 Warner Music (no rec) WMG XS0849907521 6.25% 15/01/21 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 29 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec TMT Name Instrument Wind (Buy) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ 361 XS0922256580 FRN 30/04/19 Ba3/BB/BB- 100.7 0.2 31 -0.1 +0.3 +0.8 +1.4 XS1082635712 FRN 15/07/20 Ba3/BB/BB- 99.9 4.0 407 +0.0 +0.3 +0.9 +1.3 - --/BB/BB- 100.4 3.9 384 -1.3 +0.3 -0.4 +1.4 + Ba3/BB/BB- 100.1 4.2 429 +0.0 +0.4 +0.9 +1.4 - Caa1/B/B- 100.5 6.8 678 -1.4 +0.2 -0.5 +1.3 + XS1028411152 7.125% 15/05/24 B2/B/-- 108.9 5.3 516 -0.7 +0.3 +0.2 +1.3 - XS1170079443 4.625% 15/01/25 B2/B/-- 93.6 5.5 479 -1.8 +0.0 -0.9 +1.0 + XS1175813655 3.75% 15/01/25 Ba3/BB-/-- 93.8 4.6 383 -1.6 +0.1 -0.7 +1.2 + --/BB+/-- 101.4 3.1 285 +0.0 +0.2 +0.9 +1.3 - --/B+/BB 101.7 4.4 436 -0.1 +0.8 +0.8 +1.8 + + XS1082636876 4% 15/07/20 XS1204622960 FRN 15/07/20 XS1055940206 7% 23/04/21 Ziggo (Hold) FNL Rating WINDIM 5Y CDS ZIGGO 5Y CDS Akelius Fastigheter (no rec) 263 AKFAST XS1295537077 3.375% 23/09/20 Alfa Group (no rec) - ABHFIN XS1076087375 5.5% 10/06/17 Allied Irish Banks (Hold) AIB 5Y CDS 143 XS1057481084 2.75% 16/04/19 Ba1/BB+/BB 105.5 1.1 104 +0.2 +0.4 +1.1 +1.4 XS1202664386 1.375% 16/03/20 Ba1/BB+/BB 101.1 1.1 95 +0.3 +0.5 +1.2 +1.6 B1/B+/BB- 101.0 3.9 365 -0.5 B1/BB-/-- 102.2 4.7 477 +0.1 +1.0 +1.0 +2.1 - Ba1/--/-- 89.1 7.0 625 -0.9 +0.8 +0.0 +1.9 + XS1325125158 4.125% 26/11/25 (SUB) Arrow Global Finance (no rec) + + ARRGL XS1132462786 FRN 01/11/21 Atradius (no rec) +0.4 ATRADI XS1028942354 5.25% 23/09/44 (SUB) Banca MPS (no rec) MONTE 5Y CDS XS0236480322 FRN 30/11/17 (SUB) 261 Caa3/--/CCC 86.4 7.4 749 -6.1 -8.8 -5.2 -7.7 - B3/--/B- 101.5 3.2 311 -0.4 +0.3 +0.5 +1.4 + XS0503326083 5% 21/04/20 (SUB) Caa3/--/CCC 94.3 6.8 637 -4.0 -7.3 -3.1 -6.3 + XS0540544912 5.6% 09/09/20 (SUB) Caa3/--/CCC 95.2 7.0 660 -4.6 -7.8 -3.7 -6.7 + --/B-/BB- 96.1 3.1 317 -2.5 -2.9 -1.6 -1.9 - XS1017615920 3.5% 20/01/17 --/--/B+ 96.5 7.1 691 -1.5 -2.2 -0.7 -1.2 - XS1057050855 2.75% 11/04/17 --/--/B+ 95.9 6.7 611 -1.6 -2.2 -0.7 -1.2 - XS0985326502 5% 25/10/18 --/--/B+ 94.7 6.9 710 -5.1 -6.6 -4.2 -5.5 + XS1205644047 2.75% 20/03/20 --/--/B+ 86.8 6.4 622 -2.8 -5.7 -1.9 -4.7 - XS1300456420 9.5% 29/09/25 (SUB) --/--/B 92.3 11.7 1,140 -7.4 -10.7 -6.5 -9.6 - XS1051696398 3.625% 01/04/19 Banca P. Emilia Romagna (no rec) BPEIM XS0300345971 FRN 15/05/17 (SUB) Banca Pop. di Vicenza (no rec) VICEN Banca Popolare di Milano (no rec) PMIIM 5Y CDS 180 XS0372300227 9% PERP (SUB) Caa2/CCC/B+ 109.0 5.3 516 -0.2 +0.4 +0.7 +1.5 - XS1024830819 4.25% 30/01/19 Ba3/BB-/BB+ 107.1 1.9 188 +0.1 +0.8 +1.0 +1.8 - B3/--/BB 108.4 5.2 499 -3.8 -3.1 -2.9 -2.1 + +0.4 +1.3 +1.3 +2.4 - XS0597182665 7.125% 01/03/21 (SUB) Banco de Sabadell (Hold) SABSM 5Y CDS ES0213860051 6.25% 26/04/20 (SUB) Banco Popolare Scarl (Hold) 160 B1/B+/-- 113.0 3.1 BPIM 5Y CDS 288 199 XS0869136316 4.3% 06/01/18 Ba3/--/BB 104.5 1.9 211 -0.2 +0.0 +0.7 +1.0 - XS1070681397 2.375% 22/01/18 Ba3/--/BB 101.1 1.8 187 -0.2 -0.2 +0.7 +0.8 + XS1293577208 2.625% 21/09/18 Ba3/--/BB 101.7 2.0 201 -0.2 +0.1 +0.7 +1.1 - XS1044894944 3.5% 14/03/19 Ba3/--/BB 103.6 2.3 231 -0.3 +0.0 +0.5 +1.1 + XS1266866927 2.75% 27/07/20 Ba3/--/BB 101.2 2.5 228 -0.6 +0.0 +0.3 +1.1 + XS0555834984 6% 05/11/20 (SUB) B3/--/BB- 103.9 5.1 486 -3.9 -4.2 -3.0 -3.1 + XS0632503412 6.375% 31/05/21 (SUB) B3/--/BB- 104.4 5.4 514 -5.3 -5.1 -4.4 -4.1 + Banco Popular Espanol (no rec) POPSM 5Y CDS 181 XS1017790178 2.5% 01/02/17 Ba2/--/BB- 101.9 0.9 91 +0.0 +0.1 +0.9 +1.1 + XS1169791529 2% 03/02/20 Ba2/--/BB- 99.7 2.1 193 +0.2 -0.3 +1.1 +0.7 + ES0213790019 8% 29/07/21 (SUB) --/--/B+ ES0213790027 8.25% 19/10/21 (SUB) --/--/B+ Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 30 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec FNL Name Instrument Banco Santander (Hold) PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ 121 XS0418135041 2% PERP (SUB) Ba2/BB+/BB XS0418134663 2% PERP (SUB) Ba2/BB+/BB Bank of Ireland (Hold) BKIR 5Y CDS 149 XS0487711573 10% 12/02/20 (SUB) Ba3/BB/-- 125.8 3.3 317 -0.2 +1.5 +0.6 +2.6 XS0867469305 10% 19/12/22 (SUB) --/BB/-- 134.9 4.2 370 -0.1 +1.5 +0.8 +2.5 - Ba3/BB/-- 103.9 3.1 299 -0.5 +0.9 +0.4 +2.0 + ES0214977144 4.375% 14/02/17 B1/BB/BB+ 104.5 0.7 63 +0.0 +0.3 +0.9 +1.4 + ES0313307193 1.5% 10/11/17 --/BB/BB+ ES0313307003 3.5% 17/01/19 --/BB/BB+ 105.8 1.6 154 +0.0 +0.1 +0.9 +1.2 + --/B/BB 100.3 4.0 384 -0.3 +0.3 +0.6 +1.4 - +0.0 +0.7 +0.9 +1.8 - +0.0 +0.4 +0.9 +1.5 + -0.9 +0.0 +0.0 +1.0 - XS1075963485 4.25% 11/06/24 (SUB) Bankia (Hold) - BKIASM ES0213307004 4% 22/05/24 (SUB) Bankinter (no rec) BKTSM 5Y CDS ES0213679196 6.375% 11/09/19 (SUB) Barclays (Hold) 116 Ba1/BB/-- 114.4 2.4 BACR 5Y CDS XS0214398199 4.75% PERP (SUB) BAWAG P.S.K. (Hold) 225 60 Ba2/BB/BB+ 100.5 4.6 BAWAG 5Y CDS XS0987169637 8.125% 30/10/23 (SUB) BayernLB (Hold) 446 171 Ba1/--/-- 123.9 4.5 BYLAN 5Y CDS 390 77 XS0326869665 5.75% 23/10/17 (SUB) Ba1/--/BB 108.5 1.2 119 +0.0 +0.0 +0.9 +1.1 + XS0285330717 FRN 07/02/19 (SUB) Ba1/--/BB 96.4 2.1 217 -0.5 +1.2 +0.4 +2.3 + + BCP (no rec) BCPPL 5Y CDS PTBITIOM0057 3.375% 27/02/17 440 B1/B+/BB- 100.4 3.2 310 +0.1 +1.2 +1.0 +2.2 FR0010535971 6.117% PERP (SUB) Ba2/BB+/BBB- 107.6 2.1 203 +0.1 +0.5 +1.0 +1.6 - FR0010777524 12.5% PERP (SUB) Ba2/--/BBB- 134.4 2.9 275 +0.1 +0.7 +1.0 +1.8 + Ba2/BB+/BBB- 104.8 3.3 324 -0.1 +0.1 +0.8 +1.2 - Ba2/BB-/-- 103.6 2.3 168 -0.5 +0.0 +0.4 +1.0 + B1/B/-- 106.7 3.6 60 +0.1 +0.4 +1.0 +1.5 - BPCE (no rec) BPCEGP CaixaBank (Hold) CABKSM XS0989061345 5% 14/11/23 (SUB) Cerved (Hold) CERVIM XS0876813600 6.375% 15/01/20 XS0876835595 8% 15/01/21 (SUB) Commerzbank (Hold) CMZB 5Y CDS 88 DE000CB83HU8 10% 30/01/17 (SUB) Ba2/BB+/-- 108.7 2.2 222 -0.2 -0.1 +0.7 +0.9 + DE000CB83HX2 9.5% 14/03/17 (SUB) Ba2/BB+/-- 109.2 2.2 216 +0.0 +0.0 +0.9 +1.1 + DE000CZ22EH9 5% 30/10/17 (SUB) Ba2/BB+/BBB- 106.3 1.8 161 +0.4 +0.7 +1.3 +1.7 - DE000CZ31PX3 FRN 30/03/18 (SUB) Ba2/BB+/BBB- 102.4 2.0 209 +0.9 +0.9 +1.7 +1.9 - DE000CB83CE3 6.375% 22/03/19 (SUB) Ba2/BB+/BBB- 113.9 2.0 194 -0.3 +0.7 +0.6 +1.8 + DE000CB83CF0 7.75% 16/03/21 (SUB) Ba2/BB+/BBB- 123.5 2.9 261 -1.4 +1.7 -0.5 +2.7 + + Crédit Agricole (Hold) ACAFP 5Y CDS Ba2/BB+/BBB- 114.4 1.9 179 +0.1 +0.4 +1.0 +1.4 FR0010670422 10.653% PERP (SUB) Ba2/BB+/BBB- 118.0 3.2 377 -0.8 -0.6 +0.1 +0.5 - FR0010814434 7.875% PERP (SUB) Ba2/BB+/BBB- 118.1 2.9 278 +0.2 +0.6 +1.1 +1.7 + Ba1/BB+/BBB- 104.1 2.1 197 +0.1 +0.4 +1.0 +1.4 + DANBNK 5Y CDS XS0287195233 4.878% PERP (SUB) Deutsche Bank (Hold) 94 --/BB-/BB+ 106.8 5.1 495 +0.3 +1.8 +1.2 +2.8 + Ba3/--/BB+* 102.8 4.0 410 +0.2 +0.4 +1.1 +1.4 + DPB XS0307741917 5.983% PERP (SUB) Dexia Kommunalbank (Hold) 61 DB 5Y CDS DE000A0TU305 8% PERP (SUB) Deutsche Postbank (no rec) DEXGRP 5Y CDS XS0307581883 FRN 10/07/17 (SUB) EFG Hellas (no rec) 69 FR0010603159 8.2% PERP (SUB) Danske Bank (no rec) 135 Caa3/CCC-/B- 93.4 5.2 529 +0.8 +0.7 +1.7 +1.7 + C/CCC+/C 90.2 8.9 870 -1.4 +0.4 -0.5 +1.5 + B2/B+/-- 99.7 5.9 607 -0.5 EUROB XS1081588086 4.25% 26/06/18 Encore (no rec) Rating SANTAN 5Y CDS ECPG XS1117279619 FRN 15/11/21 +0.4 - Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 31 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec FNL Name Instrument Erste Bank (Hold) Rating PX Yield ERSTBK 5Y CDS XS0260783005 FRN 19/07/17 (SUB) Spd TR 1w TR 1m ER 1w ER 1m LQ 131 Ba2/BB+/BBB 98.5 2.0 209 -0.1 +0.8 +0.8 +1.9 + --/--/BB 83.0 7.5 663 -0.8 +0.0 +0.1 +1.0 - B2/B+/-- 104.2 6.5 626 -0.5 +2.9 +0.4 +3.9 - XS0987109658 3.984% 30/10/18 Ba2/BB+/BB+ 98.4 4.6 460 -0.5 +0.4 +0.4 +1.5 + XS1084024584 4% 01/07/19 Ba2/BB+/BB+ 97.6 4.8 467 -0.1 +1.7 +0.8 +2.8 + Ba1/BB+/-- 95.3 4.7 425 -0.5 +0.1 +0.4 +1.1 - FR0010533414 6.298% PERP (SUB) --/--/BB 101.3 5.5 559 -0.9 -0.5 +0.0 +0.6 + FR0011896513 6.375% PERP (SUB) --/--/BB+ 96.8 6.8 623 -1.6 -1.8 -0.7 -0.7 + FR0010815464 7.875% 27/10/39 --/--/BB+ 107.6 5.6 555 -1.0 -0.6 -0.1 +0.4 + Ethias Vie (no rec) ETHIAS BE6279619330 5% 14/01/26 (SUB) Garfunkelux (no rec) GFKLDE XS1263891910 7.5% 01/08/22 Gazprombank (Sell) GPBRU Grand City Properties (no rec) GYCGR XS1191320297 3.75% PERP (SUB) Groupama (Hold) CCAMA HSH Nordbank (Sell) HSHN 5Y CDS DE000HSH2H23 FRN 14/02/17 (SUB) 188 B1/--/B-*+ 91.1 8.6 872 +0.0 +0.4 +0.9 +1.5 + --/B/BB 96.5 5.9 567 -0.8 -0.3 +0.1 +0.8 - B3/B/-- 101.3 7.9 788 -0.8 --/BB/BBB 102.1 1.4 121 +0.2 Ba1/--/-- 100.4 1.6 170 XS0360809577 6.625% 08/05/18 (SUB) Ba2/BB-/BB+ 109.8 2.5 243 XS0365303675 FRN 28/05/18 (SUB) Ba1/BB/BBB 100.8 1.5 164 XS0371711663 8.047% PERP (SUB) Ba3/B+/BB 112.2 3.1 299 Ba1/BB/BBB 109.6 2.3 223 Ibercaja (no rec) CAZAR ES0244251007 5% 28/07/25 (SUB) ICBPI (no rec) ICBPI XS1318392864 8.25% 30/05/21 (PIK) Iccrea Banca (no rec) XS1143070503 1.875% 25/11/19 Immigon Portfolioabbau (no rec) + +0.8 +1.1 +1.9 + -0.1 -0.3 +0.8 +0.7 - -0.3 +0.1 +0.6 +1.2 + -0.5 -0.5 +0.4 +0.6 + +0.1 +1.0 +1.0 +2.0 - -0.6 -0.2 +0.3 +0.8 + IMIGON AT000B053442 FRN 17/07/17 Intesa Sanpaolo (Hold) +0.1 ICCREA Caa1/--/-- ISPIM 5Y CDS IT0004692817 FRN 31/03/18 (SUB) XS0452166324 5% 23/09/19 (SUB) XS0456541506 8.375% PERP (SUB) 89 Ba3/B+/BB 118.3 3.3 315 +0.1 +1.0 +1.0 +2.0 - XS0526326334 5.15% 16/07/20 (SUB) Ba1/BB/BBB 111.6 2.4 226 -0.9 -0.2 +0.0 +0.9 + XS0971213201 6.625% 13/09/23 (SUB) Ba1/BB/BBB 121.2 3.5 289 -0.8 +0.0 +0.1 +1.1 - XS1222597905 2.855% 23/04/25 (SUB) Ba1/BB/BBB 97.8 3.1 232 -0.7 +1.2 +0.2 +2.2 - XS1109765005 3.928% 15/09/26 (SUB) Ba1/BB/BBB 102.9 3.6 267 -1.1 +0.1 -0.3 +1.2 + --/--/BB+ 97.5 6.4 604 -0.2 +2.5 +0.7 +3.5 + --/B/B- 104.1 5.3 414 -0.2 +0.2 +0.7 +1.2 - +0.1 +1.7 +1.0 +2.8 + IPF (no rec) IPFLN XS1054714248 5.75% 07/04/21 Kaufman & Broad (no rec) KAUF XS1050202446 7% 30/09/19 Kazkommertsbank (no rec) KKB 5Y CDS XS0286431100 6.875% 13/02/17 786 Caa2/B-/B- 98.9 8.1 793 XS1094672273 FRN 15/08/20 B2/BB-/-- 101.3 XS1094612378 7% 15/08/21 B2/BB-/-- -0.1 +0.4 +0.8 +1.5 + 105.6 5.4 527 -0.3 +0.1 +0.6 +1.2 XS1094674642 9.5% 15/08/22 Caa1/B-/-- + 105.6 8.1 785 -0.4 +0.2 +0.5 +1.2 - Ba1/BBB-/BB 107.0 2.6 233 +0.2 +0.6 +1.1 +1.7 - Ba1/BBB-/-- 102.5 3.7 314 +0.1 +0.6 +0.9 +1.7 - IT0004645542 5% 15/11/20 (SUB) --/BB/-- 107.7 3.3 305 -3.2 -4.0 -2.3 -2.9 + IT0004917842 5.75% 18/04/23 (SUB) --/BB/-- 113.4 3.6 312 -2.6 -1.8 -1.7 -0.8 + Lock (no rec) LINDOR Medical Properties Trust (no rec) MPW XS0975547141 5.75% 01/10/20 XS1278084147 4% 19/08/22 Mediobanca (no rec) BACRED 5Y CDS 127 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 32 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec FNL Name Instrument Natixis (no rec) FR0010531012 6.307% PERP (SUB) Nord/LB (Hold) PX Yield XS0520938647 6% 29/06/20 (SUB) Spd TR 1w TR 1m ER 1w ER 1m LQ +0.1 +0.4 +1.0 +1.5 - 68 Ba2/BB+/BBB- 107.6 2.2 NDB 5Y CDS 211 119 Ba1/--/-- 113.8 2.7 256 -0.5 -1.0 +0.4 +0.1 + Ba1/--/-- 109.0 3.4 282 +0.4 -2.9 +1.3 -1.9 + --/BB-/B+ 101.8 1.9 176 +0.0 +0.3 +0.9 +1.3 + PTBEQKOM0019 2.625% 08/05/17 B2*-/--/-- 93.4 7.8 783 +0.1 +2.8 +1.0 +3.9 + PTBENJOM0015 4.75% 15/01/18 B2*-/--/-- 94.5 7.8 773 +0.4 +4.6 +1.3 +5.6 + PTBENKOM0012 4% 21/01/19 B2*-/--/-- 92.4 6.8 676 +0.7 +4.7 +1.6 +5.7 + B2*-/--/-- 70.8 5.7 421 +0.4 +3.4 +1.3 +4.5 - XS0619437147 6.625% 18/05/21 (SUB) Ba2/BB+/-- 104.8 5.6 528 -1.3 -1.2 -0.4 -0.1 + XS0843322750 5.875% 27/04/23 (SUB) Ba2/BB+/-- 100.6 5.6 560 -1.6 -3.3 -0.7 -2.3 + XS0981632804 6% 16/10/23 (SUB) Ba2/BB+/-- 93.7 7.0 650 -2.9 -4.2 -2.0 -3.2 + XS1001668950 5.163% 18/06/24 (SUB) Ba2/BB+/-- 87.8 9.4 929 -2.5 -2.2 -1.6 -1.1 + XS1034950672 4.5% 21/02/25 (SUB) Ba2/BB+/-- 83.0 9.7 945 -2.7 -2.7 -1.8 -1.7 + XS0271858606 4.35% 23/01/17 (SUB) Ba2/BB+/BBB 103.8 1.0 99 +0.0 +0.2 +0.9 +1.3 + XS0323734961 7.0916% PERP (SUB) B1/B+/BB- 105.8 3.8 374 +0.2 +1.1 +1.1 +2.1 + XS0356705219 6.934% 09/04/18 (SUB) Ba2/BB+/BBB 112.5 1.5 148 -0.2 +0.4 +0.7 +1.4 + XS1049037200 3.625% 25/03/24 (SUB) Ba2/BB/BBB 103.1 2.7 258 +0.1 +0.5 +0.9 +1.6 + Ba2/--/-- 90.2 7.6 697 -2.1 -0.2 -1.2 +0.8 + Ba2/--/BB- 104.8 3.7 313 +0.1 -0.2 +1.0 +0.9 - DE000NLB2HC4 4.75% 02/10/23 (SUB) Nova Ljubljanska Banka (no rec) NOVALJ XS1081728195 2.875% 03/07/17 Novo Banco (no rec) NOVBNC XS0869315241 3.5% 02/01/43 Raiffeisen Bank Int. (no rec) RBS (Hold) RBIAV RBS 5Y CDS RLB Niederoe.-Wien (no rec) RPGBYT XS0808638539 6.75% 01/05/20 Sberbank (Hold) SBERRU 5Y CDS Ba1/--/BBB 97.4 3.9 392 -0.8 -1.3 +0.1 -0.3 - XS1082459568 3.3524% 15/11/19 Ba1/--/BBB 98.7 3.8 360 -0.6 +0.6 +0.3 +1.7 + XS0336598064 6.999% PERP (SUB) Ba2/BB+/-- 109.8 2.1 204 +0.1 +0.5 +1.0 +1.5 + XS0449487619 9.375% PERP (SUB) Ba2/BB+/-- 122.9 2.9 274 +0.2 +0.7 +1.1 +1.8 + Ba2*+/BB+/BBB- 110.5 2.0 186 +0.1 +0.8 +1.0 +1.8 + SOCGEN 5Y CDS 71 UBS 5Y CDS XS0336744650 7.152% PERP (SUB) UniCredit (no rec) 359 XS1043520144 3.08% 07/03/19 Société Générale (Hold) UBS (Hold) 58 RFLBNI XS0997355036 5.875% 27/11/23 (SUB) RPG Byty (no rec) 47 UCGIM 5Y CDS 120 XS0322918565 5.75% 26/09/17 (SUB) Ba1/BB/BBB 107.7 1.4 140 -0.1 +0.0 +0.8 +1.1 + XS0367777884 6.7% 05/06/18 (SUB) Ba3/BB-/BB+ 110.8 2.2 219 -0.3 -0.4 +0.6 +0.7 + XS0470937243 8.125% PERP (SUB) Unipol (Hold) Rating KNFP 5Y CDS B1/B+/-- 114.8 4.1 393 +0.1 +1.3 +1.0 +2.4 + XS0618847775 6.125% 19/04/21 (SUB) Ba1/BB/BBB 114.5 3.1 286 -1.2 +0.7 -0.3 +1.7 + XS0849517650 6.95% 31/10/22 (SUB) Ba1/BB/BBB 116.7 4.1 366 -1.9 -1.6 -1.0 -0.5 + XS0986063864 5.75% 28/10/25 (SUB) Ba1/BB/BBB 108.2 3.9 365 -0.9 -1.0 +0.0 +0.1 + XS0472940617 5% 11/01/17 Ba2/BB/-- 104.1 1.3 127 -0.1 +0.1 +0.8 +1.2 + XS1041042828 4.375% 05/03/21 Ba2/BB/-- 106.8 3.0 269 +0.0 +0.2 +0.9 +1.3 + XS0130717134 FRN 15/06/21 (SUB) Ba1/BB/-- 98.4 2.7 281 -0.9 -1.3 +0.0 -0.3 - XS0173649798 FRN 28/07/23 (SUB) Ba1/BB/-- 97.3 2.8 289 -1.3 -0.5 -0.4 +0.5 + XS1206977495 3% 18/03/25 Ba2/BB/-- 94.7 3.7 289 +0.1 +0.7 +0.9 +1.8 + UNIIM 5Y CDS 152 Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 33 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Sec FNL Name Instrument Veneto Banca (no rec) Rating PX Yield Spd TR 1w TR 1m ER 1w ER 1m LQ 579 -2.0 -2.6 -1.1 -1.6 - -3.8 -5.5 -2.9 -4.4 + VENBAN XS1016053537 4% 20/01/17 --/B+/-- IT0004241078 FRN 21/06/17 (SUB) --/CCC/-- XS0337685324 6.411% PERP (SUB) --/CCC-/-- XS1069508494 4% 20/05/19 XS1327514045 9.5% 01/12/25 (SUB) 98.2 6.1 --/B+/-- 96.1 5.2 520 --/CCC/-- 92.6 11.4 1,125 + Spd: FIX bonds – z-spread, FRN – discount margin, PIK bonds – mid swap, 5Y CDS spread Source: Bloomberg, iBoxx, UniCredit Research TR 1w/1m: weekly/monthly total return (%), ER 1w/1m weekly/monthly excess return vs. iBoxx HY NFI (%); LQ: Liquidity indicator CON: Consumers, ENG: Energy, IDU: Industrials, TMT: TMT, FNL: Financials UniCredit Research page 34 See last pages for disclaimer. 11 December 2015 Credit Research High Yield Pacenotes Disclaimer Our recommendations are based on information obtained from, or are based upon public information sources that we consider to be reliable but for the completeness and accuracy of which we assume no liability. All estimates and opinions included in the report represent the independent judgment of the analysts as of the date of the issue. This report may contain links to websites of third parties, the content of which is not controlled by UniCredit Bank. No liability is assumed for the content of these third-party websites. We reserve the right to modify the views expressed herein at any time without notice. Moreover, we reserve the right not to update this information or to discontinue it altogether without notice. This analysis is for information purposes only and (i) does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any financial, money market or investment instrument or any security, (ii) is neither intended as such an offer for sale or subscription of or solicitation of an offer to buy or subscribe for any financial, money market or investment instrument or any security nor (iii) as an advertisement thereof. 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Regulatory authority: “BaFin“ – Bundesanstalt für Finanzdienstleistungsaufsicht, Lurgiallee 12, 60439 Frankfurt, Germany and subject to limited regulation by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom and Prudential Regulation Authority 20 Moorgate, London, EC2R 6DA, United Kingdom. Further details regarding our regulatory status are available on request. c) UniCredit Bank AG Hong Kong Branch (UniCredit Bank Hong Kong), 25/F Man Yee Building, 68 Des Voeux Road Central, Hong Kong. Regulatory authority: Hong Kong Monetary Authority, 55th Floor, Two International Financial Centre, 8 Finance Street, Central, Hong Kong d) UniCredit Bank AG Singapore Branch (UniCredit Bank Singapore), Prudential Tower, 30 Cecil Street, #25-01, Singapore 049712 Regulatory authority: Monetary Authority of Singapore, 10 Shenton Way MAS Building, Singapore 079117 e) UniCredit Bank AG Tokyo Branch (UniCredit Tokyo), Otemachi 1st Square East Tower 18/F, 1-5-1 Otemachi, Chiyoda-ku, 100-0004 Tokyo, Japan Regulatory authority: Financial Services Agency, The Japanese Government, 3-2-1 Kasumigaseki Chiyoda-ku Tokyo, 100-8967 Japan, The Central Common Government Offices No. 7. POTENTIAL CONFLICTS OF INTERESTS RBS 3; Wienerberger 3; BCP 3; Banco Popolare Scarl 3; Piaggio 3; ABN Amro Bank 3; Banque PSA 3; Continental 3; UBS 3; Wind 3; C.I.R. 3; Deutsche Postbank 3; IKB 3; Renault 3; Key 1a: UniCredit Bank AG and/or any related legal person owns at least 2% of the capital stock of the analyzed company. Key 1b: The analyzed company owns at least 2% of the capital stock of UniCredit Bank AG and/or any related legal person. Key 2: UniCredit Bank AG and/or any related legal person has been lead manager or co-lead manager over the previous 12 months of any publicly disclosed offer of financial instruments of the analyzed company, or in any related derivatives. Key 3: UniCredit Bank AG and/or any related legal person administers the securities issued by the analyzed company on the stock exchange or on the market by quoting bid and ask prices (i.e. acts as a market maker or liquidity provider in the securities of the analyzed company or in any related derivatives). Key 5: The analyzed company and UniCredit Bank AG and/or any related legal person have concluded an agreement on the preparation of analyses. Key 6a: Employees or members of the Board of Directors of UniCredit Bank AG and/or any other employee that works for UniCredit Research (i.e. the joint research department of the UniCredit Group) and/or members of the Group Board (pursuant to relevant domestic law) are members of the Board of Directors of the analyzed company. Members of the Board of Directors of the analyzed company hold office in the Board of Directors of UniCredit Bank AG (pursuant to relevant domestic law). The application of this Key 6a is limited to persons who, although not involved in the preparation of the analysis, had or could reasonably be expected to have access to the analysis prior to its dissemination to customers or the public. Key 6b: The analyst is on the Supervisory Board/Board of Directors of the company they cover. RECOMMENDATIONS, RATINGS AND EVALUATION METHODOLOGY Company Date Rec. Company BCPPL 11/10/2015 In transition HTZ BPCEGP 11/10/2015 In transition HTZ CIRSA 9/10/2015 Buy IKB CMZB 11/2/2015 Marketweight INTNED CMZB 9/14/2015 Restricted INTNED CONGR 11/12/2015 Restricted INTNED DAA 11/10/2015 In transition ISSDC DPB 11/10/2015 In transition ISSDC EUROCA 7/8/2015 Hold KNFP EUROCA 6/16/2015 Buy MRKGR EUROCA 4/24/2015 Hold NSINO F 3/5/2015 Marketweight PEUGOT F 2/3/2015 Restricted PEUGOT HEIGR 7/29/2015 Hold PGIM HELLA 3/30/2015 Marketweight PIAGIM Date 11/10/2015 7/21/2015 11/10/2015 8/5/2015 6/3/2015 2/5/2015 3/12/2015 3/5/2015 11/10/2015 2/5/2015 4/17/2015 2/24/2015 2/19/2015 6/9/2015 9/14/2015 Rec. Sell Hold In transition Marketweight Restricted Marketweight Overweight Marketweight In transition Marketweight no rec. Hold Marketweight no rec. Sell Company PIAGIM RENAUL SAPSJ SAPSJ SNSSNS STERV TDCDC TDCDC UBS UBS VMED WIEAV WINDIM Date 3/2/2015 4/23/2015 4/24/2015 3/10/2015 11/10/2015 10/12/2015 8/10/2015 2/20/2015 10/13/2015 7/31/2015 6/16/2015 2/18/2015 8/7/2015 Rec. Hold Overweight Buy Restricted In transition Hold Overweight Marketweight Marketweight Restricted Buy Hold Buy Overview of our ratings You will find the history of rating regarding recommendation changes as well as an overview of the breakdown in absolute and relative terms of our investment ratings on our website www.disclaimer.unicreditmib.eu/credit-research-rd/Recommendations_CR_e.pdf. Note on the evaluation basis for interest-bearing securities: Recommendations relative to an index: For high grade names the recommendations are relative to the "iBoxx EUR Benchmark" index family, for sub investment grade names the recommendations are relative to the "iBoxx EUR High Yield" index family. UniCredit Research page 35 11 December 2015 Credit Research High Yield Pacenotes Marketweight: We recommend having the same portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is equal to the total return of the index. Overweight: We recommend having a higher portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is greater than the total return of the index. Underweight: We recommend having a lower portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is less than the total return of the index. Outright recommendations: Hold: We recommend holding the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is equal to the yield. Buy: We recommend buying the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is greater than the yield. Sell: We recommend selling the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is less than the yield. We employ three further categorizations for interest-bearing securities in our coverage: Restricted: A recommendation and/or financial forecast is not disclosed owing to compliance or other regulatory considerations such as a blackout period or a conflict of interest. Coverage in transition: Due to changes in the research team, the disclosure of a recommendation and/or financial information are temporarily suspended. The interest-bearing security remains in the research universe and disclosures of relevant information will be resumed in due course. Not rated: Suspension of coverage. Trading recommendations for fixed-interest securities mostly focus on the credit spread (yield difference between the fixed-interest security and the relevant government bond or swap rate) and on the rating views and methodologies of recognized agencies (S&P, Moody’s, Fitch). Depending on the type of investor, investment ratings may refer to a short period or to a 6 to 9-month horizon. Please note that the provision of securities services may be subject to restrictions in certain jurisdictions. You are required to acquaint yourself with local laws and restrictions on the usage and the availability of any services described herein. The information is not intended for distribution to or use by any person or entity in any jurisdiction where such distribution would be contrary to the applicable law or provisions. If not otherwise stated daily price data refers to pre-day closing levels and iBoxx bond index characteristics refer to the previous month-end index characteristics. Coverage Policy A list of the companies covered by UniCredit Bank is available upon request. Frequency of reports and updates It is intended that each of these companies be covered at least once a year, in the event of key operations and/or changes in the recommendation. SIGNIFICANT FINANCIAL INTEREST UniCredit Bank AG and/or other related legal persons with them regularly trade shares of the analyzed company. UniCredit Bank AG and/or other related legal persons may hold significant open derivative positions on the stocks of the company which are not delta-neutral. UniCredit Bank AG and/or other related legal persons have a significant financial interest relating to the analyzed company or may have such at any future point of time. Due to the fact that UniCredit Bank AG and/or any related legal person are entitled, subject to applicable law, to perform such actions at any future point in time which may lead to the existence of a significant financial interest, it should be assumed for the purposes of this information that UniCredit Bank AG and/or any related legal person will in fact perform such actions which may lead to the existence of a significant financial interest relating to the analyzed company. Analyses may refer to one or several companies and to the securities issued by them. In some cases, the analyzed companies have actively supplied information for this analysis. INVESTMENT BANKING TRANSACTIONS The analyzed company and UniCredit Bank AG and/or any related legal person concluded an agreement on services in connection with investment banking transactions in the previous 12 months, in return for which the Bank and/or such related legal person received a consideration or promise of consideration or intends to do so. Due to the fact that UniCredit Bank AG and/or any related legal person are entitled to conclude, subject to applicable law, an agreement on services in connection with investment banking transactions with the analyzed company at any future point in time and may receive a consideration or promise of consideration, it should be assumed for the purposes of this information that UniCredit Bank AG and/or any related legal person will in fact conclude such agreements and will in fact receive such consideration or promise of consideration. ANALYST DECLARATION The author’s remuneration has not been, and will not be, geared to the recommendations or views expressed in this study, neither directly nor indirectly. ORGANIZATIONAL AND ADMINISTRATIVE ARRANGEMENTS TO AVOID AND PREVENT CONFLICTS OF INTEREST To prevent or remedy conflicts of interest, UniCredit Bank has established the organizational arrangements required from a legal and supervisory aspect, adherence to which is monitored by its compliance department. Conflicts of interest arising are managed by legal and physical and non-physical barriers (collectively referred to as “Chinese Walls”) designed to restrict the flow of information between one area/department of UniCredit Bank and another. In particular, Investment Banking units, including corporate finance, capital market activities, financial advisory and other capital raising activities, are segregated by physical and non-physical boundaries from Markets Units, as well as the research department. Disclosure of publicly available conflicts of interest and other material interests is made in the research. Analysts are supervised and managed on a day-today basis by line managers who do not have responsibility for Investment Banking activities, including corporate finance activities, or other activities other than the sale of securities to clients. ADDITIONAL REQUIRED DISCLOSURES UNDER THE LAWS AND REGULATIONS OF JURISDICTIONS INDICATED You will find a list of further additional required disclosures under the laws and regulations of the jurisdictions indicated on our website www.cib-unicredit.com/research-disclaimer. Notice to Austrian investors: This analysis is only for distribution to professional clients (Professionelle Kunden) as defined in article 58 of the Securities Supervision Act. Notice to investors in Bosnia and Herzegovina: This report is intended only for clients of UniCredit in Bosnia and Herzegovina who are institutional investors (Institucionalni investitori) in accordance with Article 2 of the Law on Securities Market of the Federation of Bosnia and Herzegovina and Article 2 of the Law on Securities Markets of the Republic of Srpska, respectively, and may not be used by or distributed to any other person. This document does not constitute or form part of any offer for sale or subscription for or solicitation of any offer to buy or subscribe for any securities and neither this document nor any part of it shall form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Notice to Brazilian investors: The individual analyst(s) responsible for issuing this report represent(s) that: (a) the recommendations herein reflect exclusively the personal views of the analysts and have been prepared in an independent manner, including in relation to UniCredit Group; and (b) except for the potential conflicts of interest listed under the heading “Potential Conflicts of Interest” above, the analysts are not in a position that may impact on the impartiality of this report or that may constitute a conflict of interest, including but not limited to the following: (i) the analysts do not have a relationship of any nature with any person who works for any of the companies that are the object of this report; (ii) the analysts and their respective spouses or partners do not hold, either directly or indirectly, on their behalf or for the account of third parties, securities issued by any of the companies that are the object of this report; (iii) the analysts and their respective spouses or partners are not involved, directly or indirectly, in the acquisition, sale and/or trading in the market of the securities issued by any of the companies that are the object of this report; (iv) the analysts and their respective spouses or partners do not have any financial interest in the companies that are the object of this report; and (v) the compensation of the analysts is not, directly or indirectly, affected by UniCredit’s revenues arising out of its businesses and financial transactions. UniCredit represents that: except for the potential conflicts of interest listed under the heading “Potential Conflicts of Interest” above, UniCredit, its controlled companies, controlling companies or companies under common control (the “UniCredit Group”) are not in a condition that may impact on the impartiality of this report or that may constitute a conflict of interest, including but not limited to the following: (i) the UniCredit Group does not hold material equity interests in the companies that are the object of this report; (ii) the companies that are the object of this report do not hold material equity interests in the UniCredit Group; (iii) the UniCredit Group does not have material financial or commercial interests in the companies or the securities that are the object of this report; (iv) the UniCredit Group is not involved in the acquisition, sale and/or trading of the securities that are the object of this report; and (v) the UniCredit Group does not receive compensation for services rendered to the companies that are the object of this report or to any related parties of such companies. Notice to Cyprus investors: This document is directed only at clients of UniCredit Bank who are persons falling within the Second Appendix (Section 2, Professional Clients) of the law for the Provision of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other Related Matters, Law 144(I)/2007 and persons to whom it may otherwise lawfully be communicated who possess the experience, knowledge and expertise to make their own investment decisions and properly assess the risks that they incur (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on by persons who are not relevant persons or relevant persons who have requested to be treated as retail clients. Any investment or investment activity to which this communication related is available only to relevant persons and will be engaged in only with relevant persons. This document does not constitute an offer or solicitation to any person to whom it is unlawful to make such an offer or solicitation. UniCredit Research page 36 11 December 2015 Credit Research High Yield Pacenotes Notice to investors in Ivory Coast: The information contained in the present report have been obtained by Unicredit Bank AG from sources believed to be reliable, however, no express or implied representation or warranty is made by Unicredit Bank AG or any other person as to the completeness or accuracy of such information. All opinions and estimates contained in the present report constitute a judgement of Unicredit Bank AG as of the date of the present report and are subject to change without notice. They are provided in good faith but without assuming legal responsibility. This report is not an offer to sell or solicitation of an offer to buy or invest in securities. Past performance is not an indicator of future performance and future returns cannot be guaranteed, and there is a risk of loss of the initial capital invested. No matter contained in this document may be reproduced or copied by any means without the prior consent of Unicredit Bank AG. Notice to New Zealand investors: This report is intended for distribution only to persons who are “wholesale clients” within the meaning of the Financial Advisers Act 2008 (“FAA”) and by receiving this report you represent and agree that (i) you are a “wholesale client” under the FAA (ii) you will not distribute this report to any other person, including (in particular) any person who is not a “wholesale client” under the FAA. This report does not constitute or form part of, in relation to any of the securities or products covered by this report, either (i) an offer of securities for subscription or sale under the Securities Act 1978 or (ii) an offer of financial products for issue or sale under the Financial Markets Conduct Act 2013. Notice to Omani investors: This communication has been prepared by UniCredit Bank AG. UniCredit Bank AG does not have a registered business presence in Oman and does not undertake banking business or provide financial services in Oman and no advice in relation to, or subscription for, any securities, products or financial services may or will be consummated within Oman. The contents of this communication are for the information purposes of sophisticated clients, who are aware of the risks associated with investments in foreign securities and neither constitutes an offer of securities in Oman as contemplated by the Commercial Companies Law of Oman (Royal Decree 4/74) or the Capital Market Law of Oman (Royal Decree 80/98), nor does it constitute an offer to sell, or the solicitation of any offer to buy non-Omani securities in Oman as contemplated by Article 139 of the Executive Regulations to the Capital Market Law (issued vide CMA Decision 1/2009). This communication has not been approved by and UniCredit Bank AG is not regulated by either the Central Bank of Oman or Oman’s Capital Market Authority. Notice to Pakistani investors: Investment information, comments and recommendations stated herein are not within the scope of investment advisory activities as defined in sub-section I, Section 2 of the Securities and Exchange Ordinance, 1969 of Pakistan. Investment advisory services are provided in accordance with a contract of engagement on investment advisory services concluded with brokerage houses, portfolio management companies, non-deposit banks and the clients. The distribution of this report is intended only for informational purposes for the use of professional investors and the information and opinions contained herein, or any part of it shall not form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Notice to Polish Investors: This document is intended solely for professional clients as defined in Art. 3.39b of the Trading in Financial Instruments Act of 29 July 2005 (as amended). The publisher and distributor of the document certifies that it has acted with due care and diligence in preparing it, however, assumes no liability for its completeness and accuracy. This document is not an advertisement. It should not be used in substitution for the exercise of independent judgment. Notice to Serbian investors: This analysis is only for distribution to professional clients (profesionalni klijenti) as defined in article 172 of the Law on Capital Markets. Notice to UK investors: This communication is directed only at clients of UniCredit Bank who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. This document may not be distributed in Canada. CR e 7 UniCredit Research page 37 11 December 2015 Credit Research High Yield Pacenotes UniCredit Research* Erik F. Nielsen Group Chief Economist Global Head of CIB Research +44 207 826-1765 [email protected] Dr. Ingo Heimig Head of Research Operations +49 89 378-13952 [email protected] Credit Research Luis Maglanoc, CFA, Head +49 89 378-12708 [email protected] Credit Strategy & Structured Credit Research Dr. Philip Gisdakis, Head Credit Strategy +49 89 378-13228 [email protected] Dr. Christian Weber, CFA, Deputy Head Credit Strategy +49 89 378-12250 [email protected] Dr. Tim Brunne Quantitative Credit Strategy +49 89 378-13521 [email protected] Holger Kapitza Credit Strategy & Structured Credit +49 89 378-28745 [email protected] Dr. Stefan Kolek EEMEA Corporate Credits & Strategy +49 89 378-12495 [email protected] Manuel Trojovsky Credit Strategy & Structured Credit +49 89 378-14145 [email protected] Financials Credit Research Corporate Credit Research Franz Rudolf, CEFA, Head Covered Bonds +49 89 378-12449 [email protected] Stephan Haber, CFA, Co-Head Telecoms, Technology +49 89 378-15192 [email protected] Dr. Tilo Höpker Banks +49 89 378-12960 [email protected] Dr. Sven Kreitmair, CFA, Co-Head Automotive & Mobility +49 89 378-13246 [email protected] Luis Maglanoc, CFA Regulatory & Accounting Service +49 89 378-12708 [email protected] Christian Aust, CFA Industrials +49 89 378-12806 [email protected] Natalie Tehrani Monfared Regulatory & Accounting Service +49 89 378-12242 [email protected] David Bertholdt Capital Goods & Services +49 89 378-13211 [email protected] Emanuel Teuber Covered Bonds +49 89 378-12961 [email protected] Mehmet Dere Retail, Travel & Leisure, Oil & Gas +49 89 378-11294 [email protected] Robert Vielhaber Sub-Sovereigns & Agencies, Green Bonds +49 89 378-12004 [email protected] Michael Gerstner Utilities, Hybrids +49 89 378-15449 [email protected] Dr. Martina von Terzi Banks, Financial Services, Insurance +49 89 378-14245 [email protected] Alexander Rozhetskin Russia/CIS (Banks, Oil & Gas, Basic Resources, Telecoms) +44 207 826-7953 [email protected] Jonathan Schroer, CFA Media/Cable, Logistics, Business Services +49 89 378-13212 [email protected] Dr. Silke Stegemann, CEFA Health Care & Pharma, Food & Beverage, Personal & Household Goods +49 89 378-18202 [email protected] Publication Address UniCredit Research Corporate & Investment Banking UniCredit Bank AG Arabellastrasse 12 D-81925 Munich [email protected] Bloomberg UCCR Internet www.research.unicredit.eu *UniCredit Research is the joint research department of UniCredit Bank AG (UniCredit Bank), UniCredit Bank AG London Branch (UniCredit Bank London), UniCredit Bank AG Milan Branch (UniCredit Bank Milan), UniCredit Bank New York (UniCredit Bank NY), UniCredit Bulbank, Zagrebačka banka d.d., UniCredit Bank Czech Republic and Slovakia, Bank Pekao, ZAO UniCredit Bank Russia (UniCredit Russia), UniCredit Bank Romania. CR 20 UniCredit Research page 38