Why We Like Norwegian Bonds

We are outspoken in our belief in the importance of the Norwegian bond market, which has become a major alternative funding source, filling in the gaps left by the impact of the financial crisis on the banks and traditional lenders. But who better to tell the story then the Norwegians themselves, as they did at our recent New York conference.

Pareto’s Niels Lyng-Olsen provided a broad overview of the market in his excellent presentation. Looking at the broad market, Mr. Lyng-Olsen noted that the high yield markets, in general, are active with record issuance volumes and decreasing yields. In our world, the traditional banks continue to be constrained, with respect to new lending, making the bond market an important and attractive alternative source of refinancing and capex funding for the shipping and offshore sectors. The dichotomy between the two markets is clearly evident in the following two slides (from Pareto’s presentation) which illustrate the return of bond yields to pre-financial crisis levels, while the cost of bank funding remains high.
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A Specialist Investment Banking Model for Sourcing Capital and Giving Advice – Pareto Carves Out a Niche and Creates a Gateway in New York

For Pareto, it all starts with what you know and being Norwegian they are experts on industries such as shipping, oil services and E&P. In fact, their knowledge starts at the grassroots level through company and industry research and extends to asset brokerage for both ships and offshore drilling rigs. They know the players, understand industries and have global access to market intelligence. These factors together with a focused investment banking team and dedicated institutional sales force, both equity and fixed income, underlie their strength in deal origination and execution. As they say, they are “in the market” which is evidenced by three very different recent transactions. They played an important role in the Vantage Drilling bond and equity offerings and are advising Rowan on its acquisition of Skeie Drilling.
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Not Just a Warm-up

Prior to the start of the festivities, Teekay Corporation held its successful shareholders meeting. The room was filled with over 100 spectators with another 200 viewing through the webcast. What was extremely interesting to hear from the Teekay delegation was the acknowledgement that they did not recognize many of the people in the room. Fresh blood!

The first session began under cloudy but dry skies an unusual event in New York these days. The room was packed with the audience hoping to glean insights from last year’s deal of the year winners as the architects of the transactions discussed their deals and how they fit in today’s marketplace. The discussion was led by Stephen Peepels of DLA Piper.
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