Norway’s 2017 high-yield bond volumes recover as shipping bounces back

Companies raised 45 billion Norwegian crowns ($5.63 billion) via high-yield bonds in Norway from January to September, more than twice the full-year 2016 level, data from brokers DNB and financial service Stamdata showed on Wednesday.

Oslo’s corporate bond market, a vital source of cash to many mid-size shipping and oil services firms both in Norway and overseas, has rebounded after nearly drying up last year when a series of debt restructurings drove high-yield investors away.

“We’re closing in on previous highs in terms of issued volumes. There is more diversification than before, but shipping is a segment that has seen substantial growth,” DNB Markets credit analyst Magnus Vie Sundal told Reuters.

Overall volumes in 2017 could eventually amount to between 55 billion and 60 billion crowns, he added, far above the 21.6 billion seen in 2016 and just below the record 65 billion crowns raised each year from high-yield bonds in 2013 and 2014.

Of the 2017 numbers so far, the shipping industry accounted for about 16 billion crowns of the issued amount, DNB Markets estimated, about four times as much as in all of 2016.

Shipping firm Wallenius Wilhelmsen Logistics (WWL) was among the latest to take advantage of strong high-yield investor interest, raising one billion Norwegian crowns in unsecured debt on Sept. 28.

“It’s a really strong bond market. The timing is good and we have a bond maturing in June 2018. We’ll use this to refinance,” WWL corporate finance head Bjoernar Bukholm told Reuters.

Dry bulk shipper Songa Bulk , which recently completed an $18 million tap issue of a callable bond, meanwhile said it was “very pleased” with the response it received from the bond market.

“The net proceeds from the tap issue will let us continue to grow the fleet in line with our strategy,” Songa Chairman Arne Blystad told Reuters.

Facing tougher capital requirements from regulators, Nordic commercial banks have pulled back from lending to many corporate clients, analysts said.

“Some of these (firms) operate in sectors where it’s become more challenging to raise standard bank debt. Still, these are companies in which credit investors are more than comfortable to invest,” Nordea Markets chief credit analyst Oeyvind Hagen said.