The yield on Vestas Wind System A/S’s 2015 benchmark note fell to its lowest in almost a year as Danske Bank A/S and Jyske Bank A/S recommend buying the turbine maker’s debt on signs its cash troubles are fading.
The yield on Vestas’ 4.625 percent 600 million-euro bond maturing in 2015 eased to 10.74 percent as of 12:14 p.m. in Copenhagen, sending the bond to its highest since February last year. The yield peaked at 26.1 percent on May 21, 2012.
Vestas is halfway through a two-year push to cut its workforce by about 30 percent to 16,000 and aims to sell factories to reduce costs and align production capacity with market demand. The Aarhus, Denmark-based company persuaded a group of nine banks in November to provide loans until January 2015 through a new 900 million-euro credit line.
“We have seen a positive reaction to the bond since the agreement with the banks on a new loan,” said Janne Vincent Kjaer, an analyst at Jyske Bank, who’s advising clients to buy the company’s debt.
According to Kasper From Larsen, an analyst at Danske Bank, the company’s restructuring efforts are also aiding its credit profile. He also recommends investors purchase Vestas’s debt.
Vestas shares rose as much as 4.7 percent today, their highest since April 2. Trading volume today was 35 percent of the average daily sales in the past three months with 789,121 shares exchanged.
Vestas, which is vying with General Electric Co. (GE) for the lead in the global wind turbine market, has lost money for two years as overcapacity in the industry pushed down prices. Even after this year’s 46 percent gain, Vestas’s shares are down more than 90 percent since an August 2008 peak.
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