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Orsted (ORSTED DC) is one of the biggest fallers on SXXP today but cash curve is still tighter on 2-day and 1-week view.
- Orsted, broadly the world leader in offshore wind installation, scrapped two major US projects (Ocean Wind I and II) in Nov-23 citing concerns over supply chains, interest rates and failures to gain tax credits. The equity had fallen c.60% from Jun to Nov, largely after taking US offshore wind cancellation charges with 1H23 results.
- The equity has clawed back some of that performance since the Nov-23 lows (+50%) but the cash curve has failed to tighten much at all. Its most liquid ’26 bond (ORSTED 3 5/8 03/01/26) traded from sub-40bp (OAS) to over 80bp after the Summer profit warning and has then remained rangebound since Nov-23.
- Orsted (equity) is 50.1% owned by the Danish state, so has tendencies to feel guaranteed but that didn’t stop the curve blowing out after the mid-Summer profit warning. If results (due 7-Feb) are set to see big further write-downs, as the equity today implies, this curve could be pushed out again, we fear.
The above bond (S&P: BBB+, though CW negative) has moved from inline with Vattenfall (BBB+) all the way out to Fortum’s (BBB) levels.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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