Norwegian Bond Update

Although there was some activity in February, volumes, according to Nordea’s Monthly High Yield Report, remain low and the expecta­tion is to see less issuance by high yield shipping and offshore com­panies in 2008, given nervous credit fundamentals. In total, ten cor­porates have issued bonds thus far this year.

And as low as volumes may be, spreads are getting wider. The iTraxx 5-year Crossover Index of fifty European high yield credit default swaps is trading at record levels with an average spread of 545 bps during February, a 29% widening from January. The average 5 –year BB Euribor industrial credit spreads tightened by 1 bp while the 5- year B and CCC spreads widened by 73bps and 406 bps respective­ly during the month

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