Focus on Q2 company reports
The credit market’s development in June followed the one we saw in May, with a high level of activity and increasingly tight credit margins. The coronavirus is still in focus, but it is possible in many areas to see some return to normal.
At the time of writing, the Riksbank has announced that it will increase stimulus from SEK 300 billion to SEK 500 billion, and intends to also buy corporate bonds from September. The fact that the market has for some time now shown liquidity, stability and activity at a time when we are approaching the summer lull meant that a number of primary transactions took place during the month.
The fund participated in the following issues: Fastighets AB Stenvalvet, which issued a 3-year bond with variable interest, paying Stibor + 165 basis points. SKF issued a 4-year bond at Stibor +100 basis points, while Tele 2’s new 5-year bond ended up at Stibor +120 basis points. Additional names that were also active in the primary market during the month, and where the fund increased its exposure, were Nordic Entertainment Group, which issued a 3-year bond at Stibor +175 basis points, and Heimstaden Bostad, where we extended our exposure with a 2-year bond that pays Stibor +130 basis points. In the secondary market, we further reduced our exposure in Scania and increased slightly in Volvo Cars and real estate services company Coor.
June was a strong month for credits, and Carnegie Investment Grade rose 1.12 percent.
An extraordinary half year is over and a major focus will now be on the Q2 company reports. The second quarter was to a much greater extent affected by the coronavirus, and it will therefore be interesting to see the impact on company operations and how they handled it. Carnegie Investment Grade invests in well-managed, stable and sustainable companies. We prioritise a defensive and diversified portfolio, in line with our management philosophy.