Norway Defies Ragnarok as IPOs to Follow Corporate Bond Revival

Norway is shaking off the oil crisis and the evidence is in the bond and stock markets, according to the region’s largest bank.

“It’s a very positive credit market right now,” said Thorodd Bakken, head of corporate and investment banking Norway at Nordea Bank AB. “It’s very hot. A lot of issues in the pipeline.”

The revival of corporate debt issuance after the market ground close to a halt earlier this year will be followed by several equity offerings as the Norwegian non-oil related export industry benefits from low interest rates and a weak krone.

“There’s not a big fear factor out there so investors feel safe to deploy their money,” he said. ”It’s very beneficial. Companies take the opportunity to borrow.”

Nordea arranged 211 bond issues in Norway with a total value of 48 billion kroner ($5.8 billion) through August, according to Nordea. Since then the bank, the top arranger of bond deals so far this year, has been involved in the issue of 2 billion kroner of bonds for consumer goods maker Orkla ASA and 750 million kroner of debt for Ocean Yield ASA.

And companies are also starting to look to equity markets for more capital.

“There are also some IPOs in the pipeline but a bit later,” he said in an interview in Oslo Thursday. “There are more on the way in Norway.”

Bakken, 44, sees a divided corporate Norway, where the oil sector is adjusting while the rest is doing “very well”.

“The activity in corporate Norway is OK,” he said. “Much better than what many outside Norway think. Many believe, with oil falling from $115 to $50, it’s just Ragnarok -- a big black hole in Norway -- but it’s not like that.”

But those companies dependent on oil for revenue, especially the oil rig and supply industry, will need to weather the slump for some time yet and lenders need to expect to take some losses.

“It will be tough for a couple of more years and it’s hard to say whether the bottom is reached,” he said. “It’s natural that there will be some losses.”

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