Swedbank Large Corporates & Institutions Credit Research's disclaimer

What our research is based on

Swedbank Large Corporates & Institutions Credit Research (LC&I Credit Research) department bases the research on a variety of aspects and analysis. For example: A fundamental assessment of a company's financial and business profile, current or expected market sentiment, expected or actual changes in a company's credit rating, internal or external circumstances affecting the credit quality of the company and relative assessment of the company compared to peers or other relevant companies.

Trading recommendations for fixed-income securities are mostly base on the credit spread (yield difference between the security and the relevant government bond or swap rate). Based on the type of investment recommendation or credit assessment, the time horizon can range from short-term up to 12 months.

Recommendation structure

Swedbank LC&I Credit Research's recommendation structure consists of several levels: issuer, sector and instrument. Depending of the level of recommendation, it could be in absolute or relative terms.

Issuer level

Swedbank LC&I Credit Research uses a shadow rating system based on the same terminology as Standard & Poor's ranging from AAA-D.

Credit ratings on issuer level are in absolute terms. In any case, ratings or any kind of research should not be used or relied upon as an investment advice. Changes in ratings are not the equivalent of overweight, market weight or underweight of any of the company's outstanding bonds, commercial papers or credit default swaps. A change in the credit rating indicates our view of the actual issuer and its credit quality. This should not be confused with a recommendation.

Sector level

Strong Overweight/Overweight: the return by increasing exposure to this sector is expected to exceed the return of the credit market in general.

Market weight: the return by having exposure to this sector is expected to be in line with the return of the credit market in general.

Underweight/Strong Underweight: the return by having exposure to this sector is expected to be lower than the return of the credit market in general.

Instrument level

Cash bonds:

Strong Overweight/Overweight: the return by holding this instrument is expected to exceed the return of equivalent bonds, the sector or the credit market in general.

Market weight: the return by holding this instrument is expected to be in line with the return of equivalent bonds, the sector or the credit market in general.

Underweight/Strong Underweight: the return by holding this instrument is expected to be lower than the return of equivalent bonds, the sector or the credit market in general.

Credit Default Swaps:

Buy protection: we expect the CDS-spread to widen more than the spread for peers' CDSs, the sector in general or an aggregated index.

Neutral: we expect the CDS-spread to develop in line with the spread for peers' CDSs, the sector in general or an aggregated index.

Sell protection: we expect the CDS-spread to tighten more than the spread for peers' CDSs, the sector in general or an aggregated index.

Analyst's certification

The analyst(s) responsible for the content of this report hereby confirm that notwithstanding the existence of any such potential conflicts of interest referred to herein, the views expressed in this report accurately reflect their personal views about the companies and securities covered. The analyst(s) further confirm not to have been, nor are or will be, receiving direct or indirect compensation in exchange for expressing any of the views or the specific recommendation contained in the report.

Issuer, distribution & recipients

This report by Swedbank LC&I Credit Research is issued by the Swedbank Large Corporates & Institutions business area within Swedbank AB (publ) ("Swedbank").

Swedbank is under the supervision of the Swedish Financial Supervisory Authority (Finansinspektionen) and other financial supervisory bodies where Swedbank and LC&I have branches.

Swedbank is a public limited liability company and a member of the stock exchanges in Stockholm, Helsinki, Oslo and Reykjavik, as well as a member of EUREX.

This report is distributed by Swedbank's branches. In no instance is this report altered by the distributor before distribution.

In Estonia this report is distributed by Swedbank AS, which is under the supervision of the Estonian Financial Supervisory Authority (Finantsinspektsioon).

In Lithuania this report is distributed by "Swedbank" AB, which is under the supervision of the Securities Commission of the Republic of Lithuania (Lietuvos Respublikos vertybinių popierių komisija).

In Latvia this report is distributed by Swedbank AS, which is under the supervision of The Financial and Capital Market Commission (Finanšu un kapitāla tirgus komisija).

In the United States this report is distributed by Swedbank First Securities LLC ('Swedbank First'), which accepts responsibility for its contents. Any United States institutional investor receiving the report, who wishes to effect a transaction in any security discussed in the report, should do so only through Swedbank First. Swedbank First is a U.S. broker-dealer, registered with the Securities and Exchange Commission, and is a member of the Financial Industry Regulatory Authority. Swedbank First is part of Swedbank Group.

For important U.S. disclosures, please reference:

http://www.swedbankfs.com/disclaimer/index.htm

In the United Kingdom

This communication is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5), of the Financial Promotions Order (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This communication is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons

Limitation of liability

All information, including statements of fact, contained in this research report has been obtained and compiled in good faith from sources believed to be reliable. However, no representation or warranty, express or implied, is made by Swedbank with respect to the completeness or accuracy of its contents, and it is not to be relied upon as authoritative and should not be taken in substitution for the exercise of reasoned, independent judgment by you.

Be aware that investments in capital markets - such as in this document - carry economic risks and that statements regarding future assessments are comprehended with uncertainty. You are responsible for such risks alone and we recommend that you supplement your decision-making with that material which is assessed to be necessary, including (but not limited to) knowledge of the financial instruments in question and the prevailing requirements as regards trading in financial instruments.

Opinions contained in the report represent the analyst's present opinion only and may be subject to change. In the event that the analyst's opinion should change or a new analyst with a different opinion becomes responsible for our coverage of the company, we shall endeavour (but do not undertake) to disseminate any such change, within the constraints of any regulations, applicable laws, internal procedures within Swedbank, or other circumstances.

If you are in doubt as to the meaning of the recommendation structure used by Swedbank in its research, please refer to "Recommendation structure".

This research report is produced for general distribution to eligible recipients and Swedbank is not advising nor soliciting any action based upon it. If you are not a client of ours, you are not entitled to this research report. This report is not, and should not be construed as, an offer to sell or as a solicitation of an offer to buy any securities.

To the extent permitted by applicable law, no liability whatsoever is accepted by Swedbank for any direct or consequential loss arising from the use of this report.

Conflicts of interest

In Swedbank LC&I, internal guidelines are implemented in order to ensure the integrity and independence of the research analysts.

The guidelines include rules regarding, but not limited to: contacts with the companies covered; personal involvement in the companies covered; participation in investment banking activities and supervision and review of research reports. For example:

  • Research reports are independent and based solely on publicly available information.
  • The remuneration of staff within the Credit Research department may include discretionary awards based on the firm's total earnings, including investment banking income. However, no such staff shall receive remuneration based upon specific investment banking transactions.
  • Swedbank shall not receive compensation from the company being analysed for making an investment recommendation or enter into an agreement with the said company to make an investment recommendation.

Company-specific disclosures & potential conflicts of interest

In view of Swedbank's position in its markets, you should assume that Swedbank may currently (or may in the coming three months and beyond) be providing or seeking to provide confidential investment banking services to the companies referred to in this report.

You should note that it may happen that Swedbank, its directors, its employees or its subsidiary companies at various times have had, or have sought, positions; advisory assignments in connection with corporate finance transactions; investment or merchant banking assignments and/or lending as regards companies and/or financial instruments covered by this report.

It may also occur that Swedbank LC&I may act as a sponsor in trading with financial instruments covered by this report.

Planned updates

An investment recommendation for a company that Swedbank LC&I monitor is normally updated when the company has published an interim report. An update is normally made on the day after publication. In certain cases, a recommendation may be updated in the days leading up to the said report. When required, for example if the company has some extraordinary items of news, an investment recommendation may also be updated during the period between the reporting dates.

Reproduction & dissemination

This material may not be reproduced without permission from Swedbank LC&I. This report may not be disseminated to physical or legal persons who are citizens of, or have domicile in, a country in which dissemination is not permitted according to applicable legislation or other decisions.

Reproduced by Swedbank Large Corporates & Institutions, Stockholm 2012.

Address

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