jernhusen q2/14 credit update · trend was a bit tempered yoy. additionally, underlying demand is...

IMPORTANT INFORMATION AND DISCLOSURES AT THE END OF THIS REPORT

July 21 2014

Credit Research

Andreas Zsiga +46 8 614 9670 [email protected]

www.nordeamarkets.com

Jernhusen

Q2 2014 Steady progress

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

4% YoY increase in rental revenues to SEK230m while the NOI-

margin jumped to 42% (39% Q114), reflecting price adjustments,

new depot facilities, and cost efficiency measures. On a comparable

basis, sales increased 4%, and the NOI improved 25% for the first

six months, reflecting higher rents from stations and depots.

Continued strong underlying demand. Jernhusen continues to

refer to increased sales in the Swedish retail sector, even if the Q114

trend was a bit tempered YoY. Additionally, underlying demand is

supported by continued gains in rail passenger and freight volumes.

Project investments but stable LTV. Property values increased

marginally by 1% from YE13 to SEK11.4 bn as investments bal-

anced disposals with minor valuation gains. The LTV level increased

slightly to 50% (50% by YE2013). Major development projects in-

volving the Stockholm City Station and the Malmö Central Station

has been initiated (office property, the first tenant contract signed for

40% of the space). A SEK150m upgrading of the Solna Hagalund

terminal to service MTR Expresses has been initiated.

Key credit drivers are stable Performance trend looks robust. We take comfort from the contin-

ued like-for-like improvement in revenues and NOI and increased

traffic volumes. The company should benefit from higher GDP

growth in the reminder of 2014. The ongoing project development is

a risk incorporate into the credit profile., and has solid long term

potential.

Refinancing and lower LTV improves financial risk profile. The

refinancing completed during 2013 has extended debt maturities,

hence addressing one of our previous concerns regarding Jernhusens

financial profile. The contained LTV levels, and reduced secured

debt to some 10 % of LTV is positive for senior unsecured lenders.

We see no changes to strategy or ownership risks. The govern-

ment’s SEK400bn long-term infrastructure expansion plan is intend-

ed to be partially funded by charges on properties close to stations.

While such charge could hit Jernhusen, the company is likely to

overall benefit from expansion. The plan is at a very early stage.

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

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

that and Hemsö (Nordea BBB+) offers interesting comparable

at wider spreads at the 4 year point. The Swedavia bonds (Nordea

A) are indicated slightly wider, but the difference is not material. We

think that Vasakronan’s new issue curve should carry a premium

compared to airport operator Swedavia and real-estate company

Jernhusen, reflecting the direct state ownership in the two latter enti-

ties by the Ministry of Finance.

Rental revenues and PMP (SEKm)

Debt and debt/EBITDA (SEKm, x)

Q2/14 credit update

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

Total income NOI PMP NOI-margin

Source: Company reports

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

48%

50%

52%

54%

56%

58%

60%

62%

2008 2009 2010 2011 2012 2013 2014E 2015E

Loan-to-value Debt/equity


Key info Equity ticker 953995Z SS Equity

Debt ticker JERNAB Corp

Market Cap N.A.

Website www.jernhusen.se

Ratings/Shadow ratings

Issuer Sen unsec

S&P n.r n.r

Moody’s n.r n.r.

Nordea A/Stable A/Stable

Jernhusen July 21 2014

www.nordeamarkets.com 2

Relative value comparison

-5

15

35

55

75

95

115

0 1 2 3 4 5 6 7

Vasakronan Akademiska Hus Specialfastigheter Swedavia Jernhusen

SHYP Hemsö Rikshem Fortum

Source: Bloomberg, Nordea Markets



Shadow rating approach and rationale

Applied rating methodology

Based on S&P metho-

dology

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

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

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

financial distress.

BBB stand-alone Stand alone rating profile BBB

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

cial risk profile.

Supported by attracti-

ve portfolio

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

network

Portfolio value concentrated to the three largest regions in Sweden

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

Good prospective growth in passenger volumes to support

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

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

Capped by commer-

cial property and fi-

nancial profile

Credit challenges Relatively moderate debt leverage with loan-to-value at about 50% at YE2013 (YE

2012 53%)

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

Smaller size compared to larger rated peers

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

Uplift to A given ownership support

Full state ownership

and transport policy

role

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

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

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

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

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



Group Profile

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

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

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

ship is managed by the Ministry of Finance. The portfolio value was SEK11.4 bn at H113.

Focus on rail related

properties

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

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

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

train stations, which the company develop over time.

Commerically opera-

ted & financed

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

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

four business areas:

Business dominated

by Stations

Significant project

development

Stations. A key area constituting 51% of portfolio value, 57% of rental revenues and 54%

of NOI (2013). It is dominated by retail outlets and restaurants, and some offices, in 60

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

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

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

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

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

Depots. 24 depots across Sweden with a YE13 market value of SEK3.4bn. Customers are

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

of increased traffic volumes and train operators.

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

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

operations for several years.

Figure 1: Business area composition 2013 (%) Figure 2: Revenue per property type 2013 (%)

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

0 20 40 60

Stockholm

Gothenburg

Malmö

Helsingborg

Örebro

Uppsala

Västerås

Other

Source: Company report

0

0.1

0.2

0.3

0.4

0.5

0.6

0

200

400

600

800

1000

1200

1400

2008 2009 2010 2011 2012 2013

Stations City projects Depots

Cargo terminals EBIT-marginSource: Company report

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

Property value Rental revenues NOI

Stations City projects Depots Cargo terminalSource: Company report

0 20 40 60

Resturants and retail

Depots

Terminals

City projects

Office

Other




Business Operations

Credit supportive

portfolio structure

Low vacanies

Less cyclicality than

commercial properties

in general

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

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

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

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

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

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

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

of about 5%.

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

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

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

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

Concentration to ma-

jor cities

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

As of year-end 2013 the vast part, or about 85%, of Jernhusen’s portfolio value is concent-

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

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

past years, Jernhusen has divested a number of station buildings located in smaller cities

to concentrate development in the major, growing urban areas.

Managable tennat

concentration risk

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

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

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

way infrastructure, with basically no or few alternatives.

The project business

carries higher risks

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

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

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

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

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

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

Figure 5: Tennant structure 2013 (%) Figure 6: Yield vs. 5-yr swap rate (%)

Figure 7: Lease expiery 2013 (% of total) Figure 8: Vacancy rates (%)

0

5

10

15

20

25

30

35

40

2014 2015 2016 2017 2018 2019 2020-

Share of rental revenuesSource: Company report

0

1

2

3

4

5

6

7

8

0

1

2

3

4

5

6

7

8

2008 2009 2010 2011 2012 2013

Yield SEK 5 year swap rateSource: Company reports , Bloomberg

0

2

4

6

8

10

12

14

16

18

20

0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013

Area based vacancy rate Economic vacancy rateSource: Company reports

17%

9%

6%

4%

3%

61%

SJ

Euromaint Rail

Reitan

ServicehandelScandinaviaService PartnersMantena Sverige

Others



Financial Profile

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

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

Solid capital structure and financial performance

Moderate gearing

ratios

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

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

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

a net debt/equity averaging 135% over the last five years (42% and 118% by YE2013).

LTV fair for a BBB

credit

The LTV ratio has varied in the range of 50-60% in the 2008-2013 period (50% YE2013),

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

could increase towards 60% in the 2014-2016 given a high expected investment level. We

are not concerned given the stability of the business and attractiveness of properties devel-

opment, and the capacity to reduce LTV once projects are completed.

Moderate but stable

NOI-margins

Weak cash flow mea-

sures is a sector cha-

racteristic

Interest management

compares favorably

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

ing, reducing to 42% 2013. The level is comparatively moderate in a peer group perspec-

tive including commercial real estate companies, and reflect the more stable business as

well as considerable development features in the portfolio. Yield levels in Jernhusens

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

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

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

and the high equity capitalization.

FFO/Net debt has fluctuated between 4% and 7% (4.4% 2013). This is weak compared to

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

file and hence constitute no major concern in our view.

The declining EBITDA ICR trend 2009-2012 has reversed and stabilized, reaching a re-

ported 3.2x at YE2013 (3.2x 2012). This compares well to sector peers. The improvement

reflects fairly stable EBITDA levels combined with significantly reduced interest expens-

es given the declining interest rate environment. Jernhusen has a well extended average

interest rate maturity of 3.6 years at YE 2013, which will provide protection in a potential-

ly raising interest rate environment in our view.

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

2008 2009 2010 2011 2012 2013


0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

2008 2009 2010 2011 2012 2013

Total income NOI PMP


48%

50%

52%

54%

56%

58%

60%

62%

46%

48%

50%

52%

54%

56%

58%

60%

62%

2008 2009 2010 2011 2012 2013

Source: Company reports , Nordea

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

2008 2009 2010 2011 2012 2013

Source: Company reportsSource:



Funding and Liquidity on an improving trend

H1 2012 refinanicng

credit positive

A well diversified fun-

ding structure

Jernhusen has traditionally relied on secured bank financing. During 2012 and 2013, the

company has shifted towards market based funding, reducing the level of bank debt sub-

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

including debt maturity extension and lower secured LTV, as credit supportive

During H113, the company agreed several credit facilities totaling SEK4bn, replacing the

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

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

which was utilized at SEK2.9bn at YE2013. A SEK1bn facility remain secured.

As part of the refinancing, the company has issued a total of SEK2.3bn of bonds under its

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

equivalent of 10% by YE2013 (6% H114), well in line with the company’s financial tar-

gets.

Change of control

protection

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

duce its ownership below 100% of shares and votes.

Adequate liquidity

bordering strong

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

have now been addressed. The maturity profile has been extended during 2013 to 2.7

years at YE13 (2.6yrs H114). Short term debt maturities largely consist of CPs. Liquid

assets consist of some SEK25-200 mn in cash (SEK240m H214, seasonally fluctuating)

and unutilized committed credit lines of SEK3.3bn at H114.

. Financial policy provides adequate risk management

Financial policy is

balanced

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

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

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

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

Figure 9: Debt and interest maturity profile 2013 (yrs) Figure 10: Loan portfolio Q313 (SEK bn)

Area Policy requirement Comment

Average debt maturity Minimun 2 years Positive, limits refinancing risk

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

Secured funding LTV Maximum 200% Positive for bond holders

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

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

ICR Minium 2x Adequate, sector standard

Equity ratio 35-45% Adequate, provide good tolerance

guidance

0

500

1000

1500

2000

2500

0

500

1000

1500

2000

2500

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

Interest DebtSource: Company report

0 2000 4000 6000 8000

0 1000 2000 3000 4000 5000 6000 7000

Secured bank facilities

Unsec. bank facilities

Bonds (MTN)

CP

Overdraft facility

Other loans

Utilized FrameSource: Company reports



LTV and ICR Rental revenues and profitability

Key Financials

Key Financial Ratios and forecast

2013-2015 reflect a

peak in investments

Our 2014-2016 forecast incorporates a significant net investment level (SEK2.4 bn), with

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

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

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

per investment activity to weakening market conditions.

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2008 2009 2010 2011 2012 2013 2014E 2015E 2016E



0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

48%

50%

52%

54%

56%

58%

60%

62%

2008 2009 2010 2011 2012 2013 2014E 2015E

Loan-to-value Debt/equity


Income statement (SEKm) 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

Total income 868 1,014 1,094 1,161 1,140 1,104 1,236 1,385 1,551

Net operating income 405 453 498 549 508 463 524 587 657

Depreciation 0 0 0 0 0 0 0 0 0

Capital gains 0 0 0 0 0 0 0 0 0

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

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

Operating income 166 103 739 392 523 797 614 678 748

Property management profit (PMP) 368 414 452 507 468 427 320 340 401

Net financial expenses (124) (55) (99) (163) (182) (147) (164) (207) (216)

Pre-tax profit 42 48 641 229 341 650 450 471 532

Tax (paid) 11 (4) (151) (54) 222 (137) 100 100 100

Deferred tax 0 0 0 0 0 0 0 0 0

Net profit 53 43 490 175 564 513 550 571 632

Balance sheet (SEKm) 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

Properties 7,186 8,946 9,502 10,829 9,896 11,327 12,857 13,887 14,017

Other assets 651 768 900 744 744 592 592 592 592

Cash and bank 31 11 6 10 8 0 0 0 0

Total assets 7,868 9,726 10,407 11,583 10,648 11,920 13,450 14,480 14,610

Equity 3,121 3,618 4,011 4,088 4,555 4,973 5,005 5,140 5,505

Interest-bearing liabilities 4,042 5,279 5,347 6,484 5,268 5,879 7,213 8,108 7,872

Non-interest liabilities 401 520 591 498 526 630 794 794 794

Total liabilities and equity 7,868 9,726 10,407 11,583 10,648 11,920 13,450 14,480 14,610

Debt 4,042 5,279 5,347 6,484 5,268 5,879 7,213 8,108 7,872

Cash flow statement (SEKm) 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

FFO 204 345 357 349 282 258 320 341 402

Cash flow from operations 276 480 347 343 343 360 320 341 402

Investments (properties) (609) (2,129) (1,401) (1,161) (1,060) (1,288) (1,500) (1,500) (1,500)

Disposals (properties) 48 73 1,086 5 2,114 87 100 600 1,500

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

DPS 25 25 25 25 25 33 33 34 35

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

Discretionary cash flow (385) (1,676) (68) (913) 1,297 (942) (1,180) (659) 302

Key ratios 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E

Loan-to-value 56% 59% 56% 60% 53% 52% 56% 58% 56%

Equity ratio 40% 37% 39% 35% 43% 42% 37% 35% 38%

Debt/equity 130% 146% 133% 159% 116% 118% 144% 158% 143%

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

EBITDA interest coverage 4.0x 7.1x 4.5x 3.0x 2.5x 2.7x 3.0x 2.6x 2.9x

EBITDA/(net interest plus dividends) 2.2x 2.5x 2.2x 1.9x 1.6x 1.6x 1.8x 1.8x 2.0x

FFO/debt 5.1% 6.5% 6.7% 5.4% 5.3% 4.4% 4.4% 4.2% 5.1%

FFO less dividends/debt 2.6% 4.6% 4.8% 3.8% 3.4% 2.7% 3.1% 3.0% 3.8%

Net rental income/interest 4.4x 10.6x 7.2x 4.7x 4.5x 4.7x 7.6x 6.7x 7.2x

Debt/EBITDA 8.2x 13.4x 12.1x 13.1x 11.5x 14.8x 14.9x 14.8x 12.8x

NOI-margin 46.6% 44.7% 45.5% 47.3% 44.6% 42.0% 42.4% 42.4% 42.4%

Property yield (actual) 11.3% 5.6% 5.4% 5.4% 5.2% 4.4% 4.3% 4.4% 4.7%

0%

20%

40%

60%

80%

100%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2008 2009 2010 2011 2012 2013 2014E 2015E 2016E





Peer Group Comparison

Government related property companies provide good peers

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

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

government owned or related property companies.

Rikshem

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

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

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

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

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

Vasakronan

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

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

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

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

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

direct government ownership and absence of any government policy role.

Akademiska Hus

Fully government owned, Akademiska Hus provides facilities for Swedish universities

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

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

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

Specialfastigheter

Fully government owned, Specialfastigheter provides offices and special property facili-

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

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

comparable (e.g. similar LTV levels).

Hemsö Jernhusen Rikshem Vasakronan Akademiska Hus Special-fastigheter

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

Nordea shadow rating BBB+ A A- A-

Nordea (stand alone) BBB+ BBB A- BBB+

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

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

(no MTN, different in the

2 PPs)

51% AP1-4 50% Gov 100% Gov

Program MTN SEK6bn MTN SEK6bn MTN SEK25bn MTN SEK8bn MTN SEK10bn

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

Gross rental income 1887 1104 1485 5,969 5,588 1,858

Net operating income 1340 463 796 4,272 3,506 1,449

Net income 674 513 1455 3,923 2,568 1,301

Funds from op. 440 258 185 2,432 2,990 1,029

Net investments 73 -1096 3054 435 2,388 1,094

Dividends 116 100 1,273 1,245 17

BV Properties 22632 11327 17100 84,074 57,557 19,455

Debt incl- shareholder loans 17699 4875 15435 43,217 23,860 9,461

Op. performance

Weighted avg lease mat (years) 7.5 3 12.4 4.3 5.3 17.3

Weighted avg debt mat (years) 2.9 2.7 1.2 2.7 6.8 4.1

Weighted avg interest mat (years) 3.3 3.8 3.3 4.5 3.4 2.1

Weighted avg cost of debt service 3.0 3.1% 3.2% 3.3% 2.6% 3.0%

Key ratios

Yield 5.9% 5.9% 4.7% 5.7% 7.2% 7.6%

NOI-margin 71% 42% 54% 72% 63% 78%

EBITDA interest cov 2.3x 3.2x 1.9x 2.7x 6.5x 5.5x

FFO/debt 2.5% 5.3% 1.2% 5.6% 12.5% 10.9%

Debt/EBITDA 13.2 9.6 23.0 13.1x 6.5x 6.4x

LTV incl. Shareholder loans 78% 50% 90% 51% 33% 48%

LTV excl. Shareholder loans 65% 50% 73% 51% 33% 48%

LTV secured debt 41% 9% 37% 16% 0% 0%

RoE 22% 11% 39% 12% 9% 15%

Disclaimer

Disclaimer and legal disclosures

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Disclaimer

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No holdings or other affiliations by analysts or associates.

Recommendations definitions

Outperform

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

return is expected to exceed the total return of the relevant

benchmark.

Market perform


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

vant benchmark.

Underperform


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

benchmark.

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

ed when the circumstances require it.

Distribution of recommendations

Market-making obligations and other significant

financial interests

Nordea has no market making or other significant obligations in

Jernhusen.

Corporate Finance transactions

Nordea Markets has no ongoing or completed public invest-

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

position in its markets, readers should however assume that

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

and beyond) be providing or seeking to provide confidential

investment banking services to the company/companies re-

ferred to in this report.

Material interest held by the issuer in shares issued

by Nordea

Recommendation Count % of total

Outperform 51 12%

Market perform 231 54%

Underperform 143 34%

Total 425 100%

As of 2014-07-21

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

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

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Institutional Sales Sweden Jonas Österlund [email protected] +46 8 614 78 69 Tomas Köhlberg [email protected] +46 8 614 6702 Utta Wester [email protected] +46 8 614 6916 Cecilia Tannerfeldt [email protected] +46 8 614 8753 Erik Nordenskjöld [email protected] +46 8 614 8257 Martin Andersson [email protected] +46 8 614 82 14 Philip Erlandsson [email protected] +46 8 614 67 09 Danish & International Sales Peter Esbjerg Schmidt [email protected] +45 3333 1905 Henrik Nielsen [email protected] +45 3333 1637 Lisbeth Rosendal [email protected] +45 3333 1869 John Carl Gyllenhammar [email protected] +45 3333 1635 Fabian Berg [email protected] +45 3333 1677

Institutional Sales Finland Jani Lindholm [email protected] +358 9 36950242 Henrik Haakana [email protected] +358 9 369 50214 Patrik Grönfors [email protected] +358 9 396 50354 Riikka Tuominen [email protected] +358 9 369 50248 Institutional Sales Norway Jan Erik Nilsen [email protected] +47 2248 7785 Espen Froyn [email protected] +47 2248 7747 Kristian Sørensen [email protected] +47 2248 7846 Hege M. Schuessler [email protected] +47 2248 7806 Morten Frimann-Dahl [email protected] +47 2248 7784 Robert Christiansen [email protected] +47 2248 7709 Stein Morten Sæther [email protected] +47 2248 7876 Kristoffer Johansen kristoffer.johansen @nordea.com +47 2248 7717 Kristoffer Solem Sletten [email protected] +47 2248 7950 Fredrik Stenrud [email protected] +47 22 48 77 71 Kenneth Nevland [email protected] +47 22 48 78 63

Credit Research Mark Schindele [email protected] +46 8 614 8201 Industrials & Utilities Andreas Zsiga [email protected] +46 8 614 6203 Industrials Rickard Hellman [email protected] +46 8 614 8726 Telecom & Consumer Emil Hjalmarsson [email protected] +46 8 614 8486 Basic Materials Elina Kalatie [email protected] +358 9 165 59009 Pulp & Paper, Finnish Industrials Lars Kirkeby [email protected] +47 2248 4264 Norwegian Industrials Lars Husby Erichsen [email protected] +47 2248 7951 Norwegian Financials Kristoffer B. Pedersen [email protected] +47 22 48 79 80 Offshore & Oil Services Anders R. Karlsen [email protected] +47 2248 4119 Shipping Michael Sandfort, CFA [email protected] +45 3333 3295 Nordic Financials & DK Industrials Global Strategy Morten Heiner Pedersen [email protected] +45 3333 1620 Credit Strategy

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jernhusen q2/14 credit update · trend was a bit tempered yoy. additionally, underlying demand is...

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