UNRATED CORPORATE BOND CHARTBOOK. EUR 69bn unrated corporate bond index volume from 224 issuers

UNRATED CORPORATE BOND CHARTBOOK EUR 69bn unrated corporate bond index volume from 224 issuers

Munich, 1 September 2015

CONTENTS

2

 SUMMARY

3

 PRIMARY MARKET

4

 MARKET OVERVIEW

16

 MARKET DATA

33

 BLOOMBERG DRSK

47

 COUNTRIES OVERVIEW

57

 APPENDIX

63

SUMMARY Summary

 Over the last month, our unrated corporate bond (CB) index (euro-denominated fixed-coupon bonds of non-financial issuers with an outstanding amount of EUR ≥50mn and time-to-maturity [workout date] ≥1 year) widened by 6% to 242bp compared to a spread widening for the iBoxx EUR Non-Financials BBB index of 14% to 110bp and the iBoxx EUR HY Non-Financials BB index of 8% to 331bp. The volatility and spread level demonstrates the crossover character of the unrated CB universe. The modified duration of 3.7 years is somewhat lower than the IG index (5.4Y) and the HY index (4.1Y).  Index issuance in August 2015 was only two bonds of a total of EUR 280mn. The index size increased to EUR 69.0bn from EUR 63.5bn yoy, and from EUR 68.9bn a month earlier. The number of issuers remained rather stable at 224 compared to 222 a month earlier. In 2015, there are around EUR 1.3bn in bond maturities left. In 2016-18, there will be approximately EUR 10bn in bond maturities annually.  In the year to date, the average coupon of issuance declined to 3.3% from 3.4% in 2014, although the average time to maturity of issuance increased to 6.5 years from 6.2 years in 2014. In YTD 2015, the average volume per issue increased to EUR 273mn from EUR 206mn in 2014. 73% of the YTD issuance has come from German, French, Spanish and Italian issuers. Another 16% were issued by Finnish and Belgian issuers.  48% of the issuers in the index are not listed and 33% of issuers have a market cap of below EUR 2bn. 71% of all index issuers issued index debt of EUR 300mn or less.  31% of the outstanding amount had no Bloomberg's Default Risk Measure (DRSK), mainly because these issuers are not listed. 28% of the amount had a DRSK of IG5-7, 27% IG8-10 and 13% had a DRSK of HY 1-6. We note that in January 2009, 40% of the index had a DRSK (i.e. with listing). Given the significant increase in issuance of listed issuers, the current share of issuers that have a DRSK/listing has risen to 69%.  For a validation and comparison between DRSK and rating agency ratings (average ratings of S&P, Moody's and Fitch) in the iBoxx non-financials IG/HY index, please refer to page 55. The chart shows that the DRSK often indicates a rating that is several notches higher than the assigned average agency rating, with the difference being more pronounced in the BB/B average rating category.  We have a buy recommendation on the unrated bonds of Amplifon, Prada and Vestas and hold recommendations on the unrated bonds of adidas, Mahle, Novomatic, Sixt and Stada.

3

CONTENTS



SUMMARY

3



PRIMARY MARKET

4

          

4

iBoxx and unrated corporates issuance volumes Latest unrated issuance activity Monthly issuance volumes by sector Issuance volumes by sector Monthly issuance volumes by country Issuance volumes by country Issuance volumes by time to maturity Issuance volumes by coupon Issuance volumes by notional amount Issuance vs. redemptions Issuance vs. redemptions by sector

5 6 7 8 9 10 11 12 13 14 15



MARKET OVERVIEW

16



MARKET DATA

33



BLOOMBERG DRSK

47



COUNTRIES OVERVIEW

57



APPENDIX

63

iBoxx and unrated corporates issuance volumes Primary Market

iBoxx NFI IG

100

Non-Rated (RS)

200

80

150

60

100

40

50

20

0

0 2003

5

iBoxx NFI HY (RS)

2004

2005

Source: iBoxx, Bloomberg, UniCredit Research

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015 YTD

HY/NR issuance volume in EUR bn

IG issuance volume in EUR bn

250

Latest unrated issuance activity Primary Market

Issue Date 08/04/15 07/31/15 07/30/15 07/30/15 07/29/15 07/21/15 07/15/15 07/15/15 07/13/15 07/10/15 07/03/15 07/02/15 07/02/15 06/23/15 06/16/15 05/20/15 05/15/15 05/13/15 04/29/15 04/28/15 04/27/15 04/13/15 04/09/15 04/08/15 04/02/15 04/01/15 04/01/15 03/27/15 03/25/15 03/18/15

6

Issuer ENAVIT CLN Group Alitalia Eurofins Scientific Bollore SIJ Tessenderlo Chemie Tessenderlo Chemie Estra Energia Korian-Medica Mota-Engil AtoS Forchem Studio 100 Shanks Group Mahle Katjes Kemira Eurofins Scientific Ansaldo Energia Trafigura Beheer ITM Enterprises Prysmian STADA UCB ACS Air France-KLM Intercos YIT Sidecu

Source: Bloomberg, UniCredit Research

ISIN Ticker Coupon Maturity (Call) Out (EUR mn) Country Sector DRSK XS1272323343 ENAVIT 1.93% Aug-22 180 IT IGS XS1270847855 CLNSPA 4.7% Aug-22 100 IT BAS XS1263964576 ALITSA 5.25% Jul-20 375 IT TAL XS1268496640 ERFFP 3.375% Jan-23 (Oct-22) 500 FR HCA IG7 FR0012872174 BOLFP 2.875% Jul-21 (Apr-21) 450 FR IGS IG8 SI0032103531 SIJDD 4% Jul-20 51 SI BAS BE0002232016 TESBBB 2.875% Jul-22 192 BE CHE IG7 BE0002233022 TESBBB 3.375% Jul-25 58 BE CHE IG7 XS1258827069 ESTENG 3.75% Jul-22 100 IT UTI FR0012833788 KORIFP 3.306% Jul-23 135 FR HCA IG8 PTMENROM0004EGLPL 3.9% Feb-20 95 PT CNS HY3 FR0012830685 ATOFP 2.375% Jul-20 (Apr-20) 600 FR THE IG8 FI4000161906 FORCOY 4.9% Jul-20 (Jan-18) 70 FI CHE BE6278665490 STUDBB 3.35% Jun-22 (Jun-20) 90 BE TAL XS1238024035 SKSLN 3.65% Jun-22 100 GB IGS IG9 XS1233299459 MAHLGR 2.375% May-22 500 DE ATO DE000A161F97 KATJES 5.5% May-20 (May-18) 60 DE FOB FI4000153937 KRAVFH 2.25% May-22 (Feb-22) 150 FI CHE IG8 XS1224953882 ERFFP 4.875% PERP (Apr-23) 300 FR HCA IG7 XS1224617347 ANSALD 2.875% Apr-20 350 IT IGS XS1222731215 TRAFIG 5% Apr-20 550 NL OIG FR0012672129 ITMENT 2.391% Apr-22 250 FR RET XS1214547777 PRYIM 2.5% Apr-22 750 IT IGS IG7 XS1213831362 SAZGR 1.75% Apr-22 300 DE HCA IG8 BE0002488634 UCBBB 1.875% Apr-22 350 BE HCA IG6 XS1207309086 ACSSM 2.875% Apr-20 500 ES CNS IG9 FR0012650281 AFFP 6.25% PERP (Oct-20) 600 FR TAL HY1 XS1200651906 INTEIT 3.875% Mar-22 120 IT PHG FI4000148937 YITYH 6.25% Mar-20 (Sep-17) 100 FI CNS IG9 ES0305063002 SIDECU 6% Mar-20 55 ES TAL

MS@Issue 125 401 -270 235 -203 220 ---195 -270 -180 -170 -269 481 -225 -150 272 --597 --

7 4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0 CNS

Source: Bloomberg, UniCredit Research

Aug-2015

Jul-2015

CHE

Jun-2015

May-2015

Apr-2015

FOB

Mar-2015

Feb-2015

ATO

Jan-2015

Dec-2014

UTI

Nov-2014

Oct-2014

MDI

Sep-2014

Aug-2014

PHG

Jul-2014

Jun-2014

THE

May-2014

Apr-2014

TAL

Mar-2014

Feb-2014

BAS

Jan-2014

Dec-2013

Nov-2013

Oct-2013

Aug-2013

Jun-2013

RET

Sep-2013

4.5 OIG

Jul-2013

HCA

May-2013

Apr-2013

IGS

Mar-2013

Feb-2013

Jan-2013

Issuance volume in EUR bn

Monthly issuance volumes by sector Primary Market

TEL

Issuance volumes by sector Primary Market

IGS

HCA

OIG

RET

CNS

BAS

TAL

PHG 20

MDI

UTI

ATO

FOB

CHE

TEL

THE

Issuance volumes LTM THE 10.9% TAL 7.0%

18

MDI 2.9% UTI 3.8%

BAS 5.6% CNS 5.8% RET 5.0%

16

Issuance volume in EUR bn

PHG 7.0%

14

ATO 6.5%

OIG 10.5%

12

FOB 3.2% CHE 2.8% IGS TEL 13.4% 0.9%

HCA 14.6%

10

Issuance volumes YTD 8 BAS 2.2%

CNS 6.4%

6

TAL 10.1%

THE 11.9%

RET 7.2%

4 2

OIG 14.3%

8

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0 HCA 17.8%

IGS 17.7%

PHG 1.0%

MDI 0.0% UTI 2.6% ATO 4.3% FOB 0.5% TEL CHE 0.0% 4.0%

9 Source: Bloomberg, UniCredit Research

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Aug-2015

Jul-2015

Jun-2015

May-2015

Apr-2015

Mar-2015

Feb-2015

Jan-2015

Dec-2014

Nov-2014

NL

Oct-2014

Sep-2014

ES

Aug-2014

Jul-2014

BE

Jun-2014

May-2014

AT

Apr-2014

FI

Mar-2014

Feb-2014

IT

Jan-2014

Dec-2013

Nov-2013

Sep-2013

DE

Oct-2013

4.5 FR

Aug-2013

Jul-2013

Jun-2013

May-2013

Apr-2013

Mar-2013

Feb-2013

Jan-2013

Issuance volume in EUR bn

Monthly issuance volumes by country Primary Market

Oth

Issuance volumes by country Primary Market

FR

DE

IT

FI

AT

BE

ES

NL

Issuance volumes LTM

Oth

AT FI 2.7% 9.4%

20

BE 8.2%

ES 7.1%

18 16

Issuance volume in EUR bn

NL 5.9%

IT 17.1%

Others 6.6%

14 DE 18.0%

12

FR 25.0%

10

Issuance volumes YTD 8 FI 7.9%

6

AT 0.0%

BE 8.1%

ES 10.3%

IT 17.9%

4

NL 4.7%

2 Others 6.4%

10

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

DE 16.3%

FR 28.4%

Issuance volumes by time to maturity Primary Market

11

Issuance volumes LTM

4-6y >10y

2-4y 8-10y

20

20

18

18

4

2

2

0

0

Source: Bloomberg, UniCredit Research

Average time to maturity in years

4

2015

6

2014

6

2013

8

2012

8

2011

10

2010

10

2009

12

2008

12

2007

14

2006

14

2005

16

2004

16

2003

Issuance volume in EUR bn

10y 5.9% 2-4y 8.6%

10y 2.2% 10%

14

6

Issuance volumes LTM 3-4% 15.6%

4-5% 7.0%

5-6% 8.1% 6-7% 6.7% 7-8% 1.2% 8-9% 0.6% 9-10% 0.0%

2-3% 44.2%

1-2% 16.7%

0-1% 0.0%

>10% 0.0%

1

8-9% 0.9%

0

0

9-10% 0.0%

Source: Bloomberg, UniCredit Research

2015

2

2014

7-8% 0.0%

2013

2

2012

4

2011

2

2010

6

2009

3

2008

8

2007

4

2006

10

2005

5

2004

12

2003

Issuance volume in EUR bn

10% 0.0%

Issuance volumes by notional amount Primary Market

160

6

120

4

80

2

40

0

0

2003

2015

8

2014

200

2013

10

2012

240

2011

12

2010

280

2009

14

2008

320

2007

16

2006

360

2005

18

2004

400

Source: Bloomberg, UniCredit Research

Issuance volumes LTM

300-500mn

20

Issuance volume in EUR bn

13

150-300mn Avg vol (RS)

>=500 mn 48.9%

Average issuance volume in EUR mn

=500mn

300-500 mn 21.3%

150-300 mn 12.6%

=500 mn 56.3%

300-500 mn 20.7%

=EUR 150mn) Upcoming redemptions by issuer ( 10

Cumulated percentage of issuers

Percentage of issuers

50%

Index debt outstanding of unrated issuers Market Overview

Percentage of issuers

50%

Cumulated percentage of issuers

100%

45%

80%

82

35%

70%

30%

60%

25%

50%

48

20%

40%

15%

30%

27

10%

20% 12

5%

10

8

8

9 3

6

8

0%

0% ≤ 100

20

10%

≤ 200

Source:Bloomberg, UniCredit Research

≤ 300

≤ 400 ≤ 500 ≤ 600 ≤ 700 ≤ 800 Index debt outstanding in EUR mn

≤ 900

≤ 1,000 > 1,000

Cumulated percentage of issuers

Percentage of issuers

40%

90%

Unrated market size by sector Market Overview

Current outstanding volumes by sector

IGS

HCA

OIG

RET

TAL

CNS

BAS

UTI

FOB

MDI

PHG

ATO

CHE

TEL

THE

80 THE 5.2%

FOB 4.7%

UTI 5.0%

PHG 4.3%

TAL 7.5%

ATO 3.6%

RET 8.3%

CHE 2.8%

OIG 11.4% HCA 11.6%

70

MDI 4.5%

IGS 18.0%

Volume outstanding in EUR bn

CNS 6.5%

BAS 6.2%

60

50

40

30

20

10 TEL 0.4%

21

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

Unrated market size by country Market Overview

Current outstanding volumes by country FR

DE

FI

IT

BE

AT

ES

NL

Others

80

IT 9.8%

BE 8.0%

70 ES 4.0% NL 3.6%

FI 9.9%

Others 10.0%

Volume outstanding in EUR bn

AT 8.6%

60

50

40

30

20

DE 20.0% FR 26.0%

10

22

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

Number of unrated issuers by country Market Overview

Current number of issuers by country Others 250

Belgium, 17, 8%

Spain, 10, 4% Netherlands , 6, 3%

Finland, 34, 15%

Others, 29, 13%

France, 41, 18%

Germany, 42, 19%

ES

BE

AT

IT

FI

FR

DE

200

Number of NFI issuers

Italy, 24, 11%

Austria, 21, 9%

NL

150

100

50

23

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

Unrated market characteristics Market Overview

Outstanding volumes by time to maturity

10 5 0

>10y

8-10y

300-500 mn 24.7%

Sep-15

15

6-8y

150-300 mn 20.5%

Jan-14

20

4-6y

>=500 mn 35.5%

Jan-13

25

2-4y

Volume outstanding in EUR bn

=EUR 150mn) Market Overview

1,600

1,400

PORSCH

1,200

AFFP

ILDFP

CDIFP BOLFP

RHK

EGLPL

PCIM

FLUXBB

AIRBR

200

HELNRR TESBBB

400

GFKGR NDXGR

UCBBB

600

FNTNGR

800

OUTOK

SKFP

1,000

0 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16

30

Source: Bloomberg, UniCredit Research

Jul-16

Aug-16

Upcoming redemptions by issuer (=150 Notional

iBoxx € Non-Financials BBB

iBoxx € HY Non-Financials BB

700

600

ASW Spread in bp

500

400

300

200

100

0 Sep-10

34

Mar-11

Sep-11

Source: iBoxx, Bloomberg, UniCredit Research

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Yield history of Unrated Core vs. iBoxx Market Data

Unrated Core NFI

Unrated Core NFI >=150 Notional

iBoxx € Non-Financials BBB

iBoxx € HY Non-Financials BB

10 9 8

Yield in %

7 6 5 4 3 2 1 0 Sep-10

35

Mar-11

Sep-11

Source: iBoxx, Bloomberg, UniCredit Research

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Spread universe of Unrated Core vs. iBoxx Market Data

500 iBoxx € HY NonFinancials

450 400

iBoxx € HY NonFinancials BB

ASW in bp

350 300 Unrated Core NFI 250 200

iBoxx € Non-Financials 150 iBoxx € Non-Financials BBB

100 50 0 3.5

4.0

4.5

5.0 mDur

36

Source: iBoxx, Bloomberg, UniCredit Research

5.5

6.0

Spread performance of unrated Core vs. iBoxx Market Data

MtD

YtD

Unrated Core NFI Unrated Core NFI 150+ Notional iBoxx € Non-Financials iBoxx € Non-Financials A iBoxx € Non-Financials BBB iBoxx € HY Non-Financials iBoxx € HY Non-Financials BB iBoxx € HY Non-Financials B -60

37

Source: iBoxx, Bloomberg, UniCredit Research

-40

-20

0 20 ASW change in bp

40

60

Unrated Core NFI ASW spread universe by modified duration (max. 1,000bp ASW and 8 mDur) Market Data

1,000 900 800

ASW in bp

700 600 500 400 300 200 100 0 0

38

1

Source: Bloomberg, UniCredit Research

2

3

4 mDur

5

6

7

8

Unrated Core volumes vs. illiquid Market Data

80

Volume outstanding in EUR bn

70

Illiquid Core

60 50 40 30 20 10 0 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

39

Source: iBoxx, Bloomberg, UniCredit Research

Unrated Core spread history by notional and spread level Market Data

By notional

By spread level NR Core NFI NR Core NFI Mid Vol

NR Core NFI Low Vol NR Core NFI High Vol

700

600

600

500

500

400

400

300

300

200

200

100

100

0 Sep-10

40

NR Core NFI NR Core NFI >=300 Notional

ASW Spread in bp

ASW Spread in bp

NR Core NFI 50-150 Notional NR Core NFI >=150 Notional 700

Sep-11

Sep-12

Source: Bloomberg, UniCredit Research

Sep-13

Sep-14

0 Sep-10

Sep-11

Sep-12

Sep-13

Sep-14

Unrated Core spread performance by notional and spread level Market Data

MtD

YtD

Unrated Core NFI

Unrated Core NFI 150+ Notional

Unrated Core NFI 300+ Notional

Unrated Core NFI High Vol

Unrated Core NFI Mid Vol

Unrated Core NFI Low Vol -10

41

Source: Bloomberg, UniCredit Research

0

10

20 30 ASW change in bp

40

50

60

Unrated Core spread history by sectors Market Data

200

800

150

600

100

400

50

200

0 Sep-10

Automobiles & Parts Chemicals Industrial Goods & Services 600

1,000

ASW Spread in bp

ASW Spread in bp

Oil & Gas (RS)

ASW Spread in bp

Utilities

250

0 Sep-11

Sep-12

Sep-13

Telecommunications

Media

ASW Spread in bp

ASW Spread in bp

500

300 200 100 0 Sep-10

42

Sep-11

Sep-12

Source: Bloomberg, UniCredit Research

Sep-13

Sep-14

400 300 200 100 Sep-11

Sep-12

Health Care Personal & Househ. Goods Travel & Leisure 600

Technology

600

400

500

0 Sep-10

Sep-14

Basic Resources Construction & Materials

Sep-13

Sep-14

Food & Beverage Retail

400

200

0 Sep-10

Sep-11

Sep-12

Sep-13

Sep-14

Unrated Core spread performance by sectors Market Data

MtD

YtD

Unrated Core NFI Telecommunications Unrated Core NFI Media Unrated Core NFI Technology Unrated Core NFI Utilities Unrated Core NFI Chemicals Unrated Core NFI Industrial Goods & Services Unrated Core NFI Food & Beverage Unrated Core NFI Construction & Materials Unrated Core NFI Basic Resources Unrated Core NFI Personal & Household Goods Unrated Core NFI Health Care Unrated Core NFI Retail Unrated Core NFI Automobiles & Parts Unrated Core NFI Travel & Leisure Unrated Core NFI Oil & Gas -40

43

Source: Bloomberg, UniCredit Research

-30

-20

-10

0 10 20 ASW change in bp

30

40

50

60

Unrated Core sector spreads by modified duration Market Data

450

400 OIG TAL

350

ASW in bp

300

250

CNSRET BAS

FOB

IGS 200 HCA

MDI 150

PHG

THE ATO

UTI TEL

CHE 100

50 2.5

44

3.0

Source: Bloomberg, UniCredit Research

3.5

4.0 mDur

4.5

5.0

5.5

Unrated Core spread history by country Market Data

Germany

France

Finland

Austria

Italy

Belgium

450 400

ASW Spread in bp

350 300 250 200 150 100 50 0 Sep-10

45

Mar-11

Source: Bloomberg, UniCredit Research

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Unrated Core spread performance by country Market Data

MtD

YtD

Unrated Core NFI Finland

Unrated Core NFI Austria

Unrated Core NFI Belgium

Unrated Core NFI Germany

Unrated Core NFI Italy

Unrated Core NFI France -60

46

Source: Bloomberg, UniCredit Research

-40

-20

0 20 ASW change in bp

40

60

80

CONTENTS



SUMMARY

3



PRIMARY MARKET

4



MARKET OVERVIEW

17



MARKET DATA

34



BLOOMBERG DRSK

47

        

47

Issuance volumes by Bloomberg default risk (DRSK) Unrated market size by Bloomberg default risk (DRSK) Unrated ASW spread universe by Bloomberg DRSK and duration Unrated Core spread history by Bloomberg DRSK Spread universe of Unrated Core by Bloomberg DRSK Unrated Core vs. iBoxx IG spread history by rating/DRSK Unrated Core vs. iBoxx HY spread history by rating/DRSK Unrated Core spread performance by DRSK Average rating by Moody's, S&P, Fitch vs. DRSK

48 49 50 51 52 53 54 55 56



COUNTRIES OVERVIEW

57



APPENDIX

63

Issuance volumes by Bloomberg default risk (DRSK) Primary Market

48

IG5-7 Avg DRSK

0.00%

18

0.08%

16

0.16%

14

0.24%

12

0.32%

10

0.40% 0.48%

8

2015

2014

2013

2012

2011

0.80%

2010

0

2009

0.72%

2008

2

2007

0.64%

2006

4

2005

0.56%

2004

6

Source: Bloomberg, UniCredit Research

Issuance volumes LTM

IG8-10

IG8-10 24.7%

1year Bloomberg default risk (DRSK) at issuance

IG2-4 HY4-6

20

2003

Issuance volume in EUR bn

NR HY1-3

IG5-7 35.6% HY1-3 5.6% HY4-6 0.0% IG2-4 2.4%

NR 31.8%

Issuance volumes YTD IG8-10 18.5% IG5-7 43.1% HY1-3 5.9% HY4-6 0.0% IG2-4 0.0%

NR 32.6%

Unrated market size by Bloomberg default risk (DRSK) Market Overview

Current outstanding volumes by DRSK NR

IG1

IG2-4

IG5-7

IG8-10

HY1-3

HY4-6

DS1-3

80 IG8-10 27.0%

HY1-3 12.2%

IG5-7 27.8%

HY4-6 0.7% DS1-3 0.6%

Volume outstanding in EUR bn

70

60

50

40

30

20 IG2-4 0.4% IG1 0.0%

NR 31.2%

10

49

Source: Bloomberg, UniCredit Research

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

0

Unrated ASW spread universe by Bloomberg DRSK and duration (listed issuers only) Market Data

1,000 1 - 4 Years

6 - 30 Years

4 - 6 Years

900 800

ASW in bp

700 600 500 400 300 200 100 0 IG1

50

IG2

Source: Bloomberg, UniCredit Research

IG3

IG4

IG5

IG6 IG7 IG8 IG9 IG10 HY1 HY2 HY3 HY4 HY5 HY6 Bloomberg 1Y Default Risk (DRSK)

Unrated Core spread history by Bloomberg DRSK Market Data

Unrated Core NFI DRSK IG2-4

Unrated Core NFI DRSK IG5-7

Unrated Core NFI DRSK IG8-10

Unrated Core NFI DRSK HY1-3

600

ASW Spread in bp

500

400

300

200

100

0 Sep-10

51

Mar-11

Source: Bloomberg, UniCredit Research

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Spread universe of Unrated Core by Bloomberg DRSK Market Data

900 800 Unrated Core NFI DRSK HY4-6

700

ASW in bp

600 500

Unrated Core NFI DRSK HY1-3

400

Unrated Core NFI DRSK IG8-10

Unrated Core NFI DRSK IG5-7

300 200 100 0 -100 2.5

52

2.7

2.9

Source: iBoxx, Bloomberg, UniCredit Research

3.1

3.3

3.5 mDur

3.7

3.9

4.1

4.3

4.5

Unrated Core vs. iBoxx IG spread history by rating/DRSK Market Data

Unrated Core NFI DRSK IG2-4

Unrated Core NFI DRSK IG5-7

Unrated Core NFI DRSK IG8-10

iBoxx € Non-Financials AA

iBoxx € Non-Financials A

iBoxx € Non-Financials BBB

350

300

ASW Spread in bp

250

200

150

100

50

0 Sep-10

53

Mar-11

Sep-11

Source: Bloomberg, UniCredit Research

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Unrated Core vs. iBoxx HY spread history by rating/DRSK Market Data

Unrated Core NFI DRSK HY1-3 Unrated Core NFI DRSK HY4-6

iBoxx € HY Non-Financials BB iBoxx € HY Non-Financials B

2,500

ASW Spread in bp

2,000

1,500

1,000

500

0 Sep-10

54

Mar-11

Source: Bloomberg, UniCredit Research

Sep-11

Mar-12

Sep-12

Mar-13

Sep-13

Mar-14

Sep-14

Mar-15

Unrated Core spread performance by DRSK Market Data

MtD

YtD

Unrated Core NFI DRSK IG

Unrated Core NFI DRSK IG2-4

Unrated Core NFI DRSK IG5-7

Unrated Core NFI DRSK IG8-10

Unrated Core NFI DRSK HY

Unrated Core NFI DRSK HY1-3 0

55

Source: Bloomberg, UniCredit Research

10

20

30 40 ASW change in bp

50

60

Average rating by Moody's, S&P, Fitch vs. DRSK (iBoxx EUR IG&HY universe) Market Data

IG1 IG2 IG3

Bloomberg 1Y DRSK Rating

IG4 IG5 IG6 IG7 IG8 IG9 IG10 HY1 HY2 HY3 HY4 HY5

Average Rating By Moody's, S&P, Fitch

56

Source: Bloomberg, UniCredit Research

B-

B

B+

BB-

BB

BB+

BBB-

BBB

BBB+

A-

A

A+

AA-

AA

AA+

AAA

HY6

CONTENTS



SUMMARY

3



PRIMARY MARKET

4



MARKET OVERVIEW

16



MARKET DATA

33



BLOOMBERG DRSK

47



COUNTRIES OVERVIEW

57

    



57

Germany issuance & redemptions top 30 issuers by outstanding France issuance & redemptions top 30 issuers by outstanding Finland issuance & redemptions top 30 issuers by outstanding Italy issuance & redemptions top 30 issuers by outstanding Austria issuance & redemptions top 30 issuers by outstanding

APPENDIX

58 59 60 61 62

63

Germany issuance & redemptions top 30 issuers by outst. volume Countries Overview

Issuer HOCHTIEF Porsche adidas Fraport Celesio Infineon Mahle Symrise Sixt Otto MBB Projects STADA ProSiebenSat.1 Media Air Berlin Solarworld freenet Rickmers VTG GfK Scholz German Pellets KTG Agrar Rhön Klinikum Asklepios Kliniken Nordex EUROGATE Ekosem-Agrar AMATHEON Deutsche Rohstoff OBI

58

Source: Bloomberg, UniCredit Research

Out Ticker Sector DRSK (EUR mn) HOTGR CNS IG8 1,750 PORSCH ATO IG4 1,000 ADSGR PHG IG7 1,000 FRAGR IGS IG7 950 CLSGR HCA IG5 850 IFXGR THE IG7 800 MAHLGR ATO 800 SYMRIS CHE IG6 800 SIXT IGS HY1 750 OTTOGR PHG 725 MBBAG OIG 673 SAZGR HCA IG8 650 PSMGR MDI IG6 600 AIRBR TAL HY6 591 SWVGR IGS HY3 527 FNTNGR TEL IG7 400 RCKMRS IGS 275 VTGR IGS IG10 250 GFKGR IGS IG8 200 SCHOLZ IGS 183 GERPEL CNS 172 KTGGR OIG HY2 170 RHK HCA IG6 152 ASKLEP HCA 150 NDXGR OIG IG8 150 EUROGT IGS 150 EKOSEM FOB 128 AMAGRI FOB 125 DROGY BAS HY1 100 OBIGR RET 100

Issuance (EUR mn) 4Q14 1Q15 2Q15 3Q15

Exp. Redemptions (EUR mn) 3Q15 4Q15 1Q16 2Q16 1,000

1,000

800 500

300 196 400 250 200 100 152 150 50

100

France issuance & redemptions top 30 issuers by outst. volume Countries Overview

Issuer Air France-KLM Eurofins Scientific Rallye Lagardere Bureau Veritas Bollore Christian Dior Galeries Lafayette Plastic Omnium BSA AtoS Eramet Neopost Iliad Soc. d'Inf. Gazieres Vilmorin & Cie Ingenico Orpea BioMerieux Cie des Alpes SEB ITM Enterprises Altran Technologies Fareva Korian-Medica Safran Groupe Steria Vranken-Pommery Monopole Norbert Dentressangle Nexity

59

Source: Bloomberg, UniCredit Research

Ticker AFFP ERFFP RALFP MMBFP BVIFP BOLFP CDIFP GLFP POMFP BSASA ATOFP ERAFP NEOFP ILDFP GAZIER RINFP INGFP ORPFP BIMFP CDAFP SKFP ITMENT ALTFP FAREVA KORIFP SAFFP RIAFP VRAPFP GNDFP NXIFP

Out Sector DRSK (EUR mn) TAL HY1 2,500 HCA IG7 1,600 RET HY4 1,599 MDI IG9 1,000 IGS IG6 1,000 IGS IG8 970 PHG IG7 800 RET 800 ATO IG8 750 FOB 658 THE IG8 600 BAS HY1 525 THE IG10 500 MDI IG7 500 UTI 500 HCA IG8 450 THE IG7 450 HCA IG7 368 HCA IG4 300 TAL IG5 300 PHG IG7 300 RET 250 THE IG8 240 HCA 225 HCA IG8 203 IGS IG5 200 THE HY1 180 FOB IG8 175 IGS IG10 160 CNS IG7 146

Issuance (EUR mn) 4Q14 1Q15 2Q15 3Q15 600 500 300 500

Exp. Redemptions (EUR mn) 3Q15 4Q15 1Q16 2Q16

450

350 300

600

500

300 250 225 135

Finland issuance & redemptions top 30 issuers by outst. volume Countries Overview

Issuer Neste Oil Sanoma Outokumpu Kemira Huhtamaki Finnair Kesko Posti Group Tornator DNA Lemminkainen YIT Ahlstrom Metsaliitto Osuuskunta Nokian Renkaat Stockmann Outotec Orion Cargotec Talvivaara Mining Co Eagle Industries PKC Group Cramo Rettig St1 Nordic Amer Sports HKScan Tieto Ramirent Vapo

60

Source: Bloomberg, UniCredit Research

Out Ticker Sector DRSK (EUR mn) NESVFH OIG IG8 1,450 SWSAV MDI HY1 500 OUTOK BAS HY3 400 KRAVFH CHE IG8 350 HUHTAM IGS IG7 325 FOY TAL IG9 270 KESBV RET IG8 250 ITELOY IGS 250 TORNAT BAS 250 DNALTD TEL 250 LEMKFH CNS IG8 240 YITYH CNS IG9 200 AHLSFH IGS IG8 200 METOSU BAS 175 NOKREN ATO IG7 150 STOCKM RET IG10 150 OTEVFH IGS HY1 150 ORNVFH HCA IG5 150 CARGOT IGS IG8 150 TALVLN BAS 110 KOTKAM BAS 105 PKCVFH THE IG9 100 CRAFH IGS IG8 100 RETTIG CNS 100 STNORD OIG 100 AMEAS TAL IG6 100 HKSAV FOB IG9 100 TIEVFH THE IG6 100 RMRVFH IGS IG8 100 VAPOOY OIG 100

Issuance (EUR mn) 4Q14 1Q15 2Q15 3Q15 500

Exp. Redemptions (EUR mn) 3Q15 4Q15 1Q16 2Q16

150 150

150 70 100

100 100

110 105

100 100

Italy issuance & redemptions top 30 issuers by outst. volume Countries Overview

Out Issuer Ticker Sector DRSK (EUR mn) Pirelli PCIM ATO IG7 1,100 Prysmian PRYIM IGS IG7 750 Davide Campari-Milano CPRIM FOB IG6 750 Mediaset MSIM MDI IG9 675 Iren IREIM UTI IG8 660 Alitalia ALITSA TAL 375 Ansaldo Energia ANSALD IGS 350 Societa Esercizi Aereoportuali SEASPA IGS 300 Kedrion KEDRIM HCA 300 Fincantieri Cantieri Navali Italiani FINCAN IGS IG9 300 Amplifon AMPIM RET IG6 275 ENAVIT ENAVIT IGS 180 SARAS SRSIM OIG IG9 175 Alerion Cleanpower ARNIM OIG IG10 130 Prada PRADA PHG IG8 130 Intercos INTEIT PHG 120 Societa Elettrica Trentina Per La Distri SETDIS UTI 110 Bracco Imaging BRACCO HCA 100 Coesia COESIA IGS 100 CLN Group CLNSPA BAS 100 Estra Energia ESTENG UTI 100 Impresa Pizzarotti & C PIZRTI CNS 100 Estra ESTRAS OIG 50 Granarolo GRAFEL FOB 50

61

Source: Bloomberg, UniCredit Research

Issuance (EUR mn) 4Q14 1Q15 2Q15 3Q15 600 750

375 350

180 130 120 100 100 100

Exp. Redemptions (EUR mn) 3Q15 4Q15 1Q16 2Q16 500

Austria issuance & redemptions top 30 issuers by outst. volume Countries Overview

Issuer voestalpine SPAR Novomatic Egger Holzwerkstoff ANDRITZ Borealis Porr UBM Realitaetenentwicklung Central Point Swietelsky Baugesellschaft DO & CO CROSS Industries Casinos Austria Lenzing AT&S Frauenthal FACC KTM Montana Tech Miba Kapsch MEG Moebelhandel

62

Source: Bloomberg, UniCredit Research

Out Ticker Sector DRSK (EUR mn) VOEAV BAS IG8 1,900 SOWA RET 650 NOVO TAL 600 EGGER BAS 570 ANDRAV IGS IG6 350 BRLS CHE 325 POSAV CNS IG8 277 UBSAV CNS HY3 252 CPOINS THE 175 SWIBAU CNS 160 DOCOTI TAL IG9 150 CROSS ATO 135 CASINO TAL 121 LENV CHE IG8 120 ATSAV IGS IG8 100 FKAAV ATO IG10 92 AVICAI IGS IG9 90 KTMG TAL IG7 85 MNTCCO IGS 80 MIBA ATO IG7 75 KTCGAV IGS IG8 71 MEGAV PHG 52

Issuance (EUR mn) 4Q14 1Q15 2Q15 3Q15 400

52

Exp. Redemptions (EUR mn) 3Q15 4Q15 1Q16 2Q16

125

60

92

CONTENTS



SUMMARY

3



PRIMARY MARKET

4



MARKET OVERVIEW

16



MARKET DATA

33



BLOOMBERG DRSK

47



COUNTRIES OVERVIEW

57



APPENDIX

63

 

63

Unrated corporate bond index criteria Index sector structure

64 65

Unrated corporate bond index criteria Appendix

Unrated bond universe includes:

Excluded bonds:

 Plain-vanilla bonds,  Callable bonds and perpetuals  Fixed-to-float bonds

    

Bond selection criteria:    

Denomination in EUR Amount outstanding ≥ EUR 50mn Time to maturity (work-out-date) ≥ 1 year No bond/issuer rating (Moody's, S&P, Fitch)  Issuer is part of the Non-Financial sector

Floating-rate notes Private placements Structured notes Index-linked notes Convertible bonds

Illiquid bonds:  No reliable pricing on Bloomberg BVAL

Hi/Lo Vol Indices:  25% of bonds with highest/lowest last-month average spreads

Bloomberg DRSK:  See on Bloomberg Terminal: DRSK Brochure: BPS L#1937032-ENG White Paper: BPS L#1937035-ENG

64

Index composition fixing:  Two workdays before the first calendar day of the month

Index sector structure Appendix

Sector

Sub-Sector

Basic Materials (BSC)

Basic Resources (BAS) Chemicals (CHE) Consumer Goods (CGD) Automobiles & Parts (ATO) Food & Beverage (FOB) Personal & Household Goods (PHG) Consumer Services (CSV) Media (MDI) Retail (RET) Travel & Leisure (TAL) Health Care (HCA) Health Care (HCA) Construction & Materials (CNS) Industrials (IDU) Industrial Goods & Services (IGS) Oil & Gas (OIG) Oil & Gas (OIG) Technology (THE) Technology (THE) Telecommunications (TEL) Telecommunications (TEL) Utilities (UTI) Utilities (UTI)

65

Source: Bloomberg, UniCredit Research

Three biggest issuers voestalpine (44.6%), Egger Holzwerkstoff (13.4%), Eramet (12.3%) Symrise (41.8%), Kemira (18.3%), Borealis (17.0%) Mahle (32.0%), Plastic Omnium (30.0%), Pirelli (24.0%) Davide Campari-Milano (23.9%), BSA (21.0%), Aryzta (8.0%) adidas (33.3%), Otto (24.2%), Christian Dior (16.7%) Lagardere (32.3%), Mediaset (21.8%), ProSiebenSat.1 Media (19.4%) Rallye (27.8%), Louis Dreyfus Commodities (15.6%), Galeries Lafayette (13.9%) Air France-KLM (44.8%), Novomatic (11.7%), Air Berlin (7.7%) UCB (24.0%), Eurofins Scientific (23.7%), Celesio (10.6%) HOCHTIEF (39.3%), ACS (11.2%), UBM Realitaetenentwicklung (5.7%) Bureau Veritas (8.1%), Fraport (7.7%), ENA Infraestructuras (7.5%) Neste Oil (18.2%), Trafigura Beheer (14.5%), Galp Energia (12.6%) Infineon (22.2%), AtoS (16.7%), Neopost (13.9%) DNA (100.0%) Fluxys Belgium (20.1%), ORES (19.6%), Iren (19.0%)

Your contacts

UniCredit Corporate Credit Research Dr. Sven Kreitmair, CFA, Co-Head Automotive & Mobility +49 89 378-13246 [email protected] Volker Maslo +49 89 378-12555 [email protected]

Stephan Haber, CFA, Co-Head Telecoms, Technology +49 89 378-15192 [email protected] Christian Aust, CFA Industrials +49 89 378-12806 [email protected] David Bertholdt Capital Goods & Services +49 89 378-13211 [email protected] Mehmet Dere Retail, Travel & Leisure, Oil & Gas +49 89 378-11294 [email protected]

66

Michael Gerstner Utilities, Hybrids +49 89 378-15449 [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 & H. Goods +49 89 378-18202 [email protected] Imprint Corporate & Investment Banking UniCredit Bank AG Credit Research Arabellastr. 12 – MRE3CC D-81925 Munich

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68

3/11/2015 10/10/2014 6/4/2015 2/16/2015

Hold Hold Hold no rec.

NOVO VOEAV PCIM VWSDC

7/22/2015 10/14/2014 9/24/2014 8/20/2015

Hold Restricted no rec. Buy

SAZGR VOEAV

Disclaimer Credit Research 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 http://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. 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-to-day 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.

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Disclaimer Credit Research 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. 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 6

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