In association withNORDIC FIs                                                                                      INSIDE:...
Thursday, 16 August 2012                                                                                                  ...
Issue 1                                                                                                                Thu...
Thursday, 16 August 2012                                                                                                  ...
Issue 1                                                                                                    Thursday, 16 Au...
Thursday, 16 August 2012                                                                                                  ...
Issue 1                                                                                                         Thursday, ...
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Nordic FIs and Covered 1


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Nordic FIs and Covered 1

  1. 1. In association withNORDIC FIs INSIDE: 3 Q&A: Handelsbanken’s Edholm discusses funding diversification& COVERED 4 CA Cheuvreux: Nordic banks outperform expectations in Q2 6 Nordic euro FI spread dataThursday, 16 August 2012 Issue 1Handelsbanken sells senior as Basel III prompts Nykredit to open Danes’UniCredit shows covered open auction season early Nykredit will kick off the latest Danish auction season on Wednesday when it opens Dkr105bn (Eu14.1bn) of sales af- ter bringing forward the start of its re- financings of adjustable rate mortgages (ARMs) ahead of the implementation of Basel III. Among other Danish mortgage credit institutions, Realkredit Danmark will not be involved in the refinancing season, but Nordea Kredit will be holding auctions on 4-6 September, DLR Kredit is expected to announce sales and BRFkredit to sell bonds for refinancing. Nykredit’s auctions — for Nykredit Realkredit and Totalkredit — will compriseSvenska Handelsbanken sold a Eu1bn 10 issue, and set the final spread at 80bp. A Dkr97bn of fixed rate mortgage bullets andyear fixed rate senior unsecured bench- syndicate official away from the leads said Dkr7bn in floating rate mortgage bonds, withmark into a buoyant market this (Thurs- that this compared with a secondary level sales in Danish kroner and euros. Most will beday) morning, as syndicate officials for Handelsbanken’s outstanding October SDOs out of capital centre H, but it will alsodeclared covered bonds open after Uni- 2021 paper of 73bp bid. be selling ROs out of capital centres G and D.Credit sold the first Italian benchmark in “Svenska Handelsbanken did a three year Morten Bækmand, head of investora year on Tuesday. senior unsecured benchmark back in July at relations, group treasury at Nykredit, said Leads Crédit Agricole CIB, Natixis, mid-swaps plus 60bp,” he said, “and they that the auctions are starting earlier this yearSociété Générale and UniCredit priced were trading in the context of plus 30bp in light of Basel III.the Eu750m long five year obbligazione this morning. BNP Paribas has meanwhile “We have moved them forward a little inbancarie garantite almost 100bp inside tightened from 150bp to 80bp, so spreads order to start to at least partly comply with theItalian government bonds after building a have halved in the past two months. LCR requirement so the auctions are finishedbook of Eu2.2bn, making the deal the first “Both deals are going very well today,” he and we have the money 30 days before the oldcovered bond ever to be priced clearly added. bonds mature on 1 October,” he said.through the respective sovereign. UniCredit’s landmark deal was the first (Continues on page 2) Handelsbanken’s issue — which had a benchmark covered bond since a Eu1.5bn Latest Nordic FI benchmarksbook of Eu1.8bn — came amid a flurry of seven year ABN Amro Bank transaction onsenior unsecured issuance, with BFCM 24 July. Senior unsecured (z spreads mid)having sold a Eu900m 10 year deal and “The timing was decisive as the deal was NDASS 2.25% 10/17 39bpANZ a £250m three year on Tuesday, and launched in the context of a lack of supply NDASS 3.25% 07/22 79bpBNP Paribas also tapping the market today, and a much better market backdrop and SHBASS 1.50% 07/15 34bpwith a Eu1bn seven year benchmark. investor mood after Draghi’s supportive DANBNK 2.50% 07/15 145bp Leads Bank of America Merrill Lynch, comments in early August,” said Vincent Covered bonds (asw spreads mid)Credit Suisse, HSBC, JP Morgan and Hoarau, head of covered bond syndicate at DNB 1.875% 06/19 20bpHandelsbanken went out with IPTs of the bookrunner Crédit Agricole CIB. TERBOL 2.00% 06/19 43bp85bp over mid-swaps area for the new (Continues on page 2) Source: CA-CIB trading 15/08/12 Page 1
  2. 2. Thursday, 16 August 2012 Issue 1Nordic covered prospects eyed ‘Walk in the park’ seen as fears of Danishafter UniCredit reopens market long dated push ease(continued from page 1) to their desks,” he said. “Smart issuers (continued from page 1) “The covered bond squeeze in the might anticipate that and decide to catch The Dkr105bn Nykredit is auctioningsecondary market, the level of redemptions the issuance window in the second half of compares with some Dkr80bn a year agoin covered bonds, as well as the overall August.” and Dkr136bn last December — the monthlack of investment alternatives also made Nordic banks would be appropriate that has historically seen a concentration ofthe deal possible at this level.” candidates, he suggested, given their recent Danish auctions. The group has been building Syndicate officials said that in the wake good secondary spread performance — up its March and September auctions in aof UniCredit’s reopener other issuers will even if their needs are not high. bid to spread its refinancings more evenlynow be looking to issue sooner rather than through the year and satisfy pressure fromlater. regulators and rating agencies. “The Nordics are back and there is “All the issuers “Last year we were in the process ofalso interest from France, so a pipeline building up this September refinancing,” saidis building up and mandates are being are aware that the Bækmand. “It’s relatively recently that weawarded,” said one. “With the success of started to issue bonds with a maturity on theUniCredit, all the issuers are aware that the market is there” 1 October to get even-sized is there. “So far we have three per year and “This puts them in a position where they “They are all very well-funded and eventually we expect to have one in June asdo not have to wait too long and face a advanced in their programme for the well, so that we have quarterly auctions —queue in September.” year,” said Hoarau. “Danish, Swedish but we haven’t implemented that yet.” Hoarau said that issuers would be well and Norwegian issuers also benefit from a Lars Mossing Madsen, head of bondadvised to take advantage of the issuance huge portion of their funding activity being trading at Nykredit, said that he expects thewindow given how quickly volatility can executed in their own currencies. auctions to be “business as usual”.return and market conditions deteriorate, “Nevertheless, given the absolute spread “If you look at the secondary market,potentially as the summer break draws levels all could now achieve in the primary the bonds are trading very well,” he a close. He said that SSA supply in market, some could decide to adopt an “Against swaps, I’d be surprised if we don’tSeptember and a potential repricing of that opportunistic approach and tap the market come flat to secondaries.sector could stop the global credit rally and shortly.” “The one year is at around Cita plus 33bp,indirectly weight on covered bond spreads. The last benchmark Nordic covered so it would be realistic to expect around “Headlines risks will increase bond was a Eu650m seven year transaction 35bp.”significantly when everyone get back for Terra BoligKreditt issued on 12 June. Anders Aalund, chief analyst at Nordea Markets, said that he expects the auctions to be “a walk in the park”. He said that the Nordic FIs & Covered Bonds only potential problem had been a fear of an increase in the volume of longer dated bonds being auctioned, but that this had not Produced by NewType Media, In association with materialised. publisher of “There has been a discussion in Denmark about the mortgage credit institutions trying The Covered to move their clients from one year to longer dated ARMs,” said Aalund. “So there was a Vincent Hoarau Bond Report Head of Covered Bond Syndicate little fear that you would get a larger amount of long dated bonds, which could have caused some problems during the auctions. Neil Day +44 20 7214 6162 “However, that discussion seems to have Managing Editor ended a bit, so there is only about Dkr20bn in Julian Burkhard three and five year bonds.” +44 20 7428 9575 Head of FI DCM Nordics & UK He said that he expects these, as well as the one years, to be in demand. Susanna Rust +44 20 7214 5472 “In the last half year the three and five year Deputy Editor bonds have widened and they will be very Florian Eichert attractive to investors,” said Aalund. “The +44 20 3174 1972 Senior Covered Bond Analyst one years are currently trading on a Cita basis at around 31bp and given the low interest +44 20 7214 6402 rates at the moment, this level also seems very attractive.”Page 2
  3. 3. Issue 1 Thursday, 16 August 2012In conversation with:Bengt Edholm, head of treasury, HandelsbankenWhat factors led to Handelsbanken In that country, the docs process is quitesubsidiary Stadshypotek issuing the only smooth. We now have the programme, weSwedish euro benchmark covered bond of have done the travelling, we have met withthe year? investors, but we came to the same situation We want to have a curve in euros, but not as in the euro market, that the all-in priceat any price. This year the domestic market was too high. At that time we also got thehas been very, very effective from a pricing impression that Aussie investors were a bitperspective. If you look at the spread to Libor, frightened of Europe, as such.the euro market has been as good as the We don’t need to push a transaction at thedomestic market, but we are not allowed to wrong price, so we are waiting for sentimenthave any form of currency risk in the balance in Australia to improve a bit before we issue.sheet, so we have to swap everything back tothe Swedish currency, and so we are always You issued a yuan bond in 2011 — whatmonitoring both the spread and the basis swap, was the rationale for that?and it is the swap market rather than the bond We have a tiny balance sheet in China andmarket that has been the bigger challenge. we saw a window to support that business What happened when we did the trade in with that renminbi transaction. Our balanceMarch was that for once the swap was nice sheet is now growing, not so fast, but we seeand we could move very quickly as we had that we can do a potential second transactioneverything ready. “We have more IR in the near future. Of course, being a rather big issuer we We see it more as marketing, actually.want to have diversification, but we will not manpower in debt We can show other investors that we evenupset the domestic investors with paying too have access to the yuan market. And in ourmuch all-in in euros, because the Swedish than equity” euro and dollar trades in senior and coveredinvestors can then buy our euro transactions, we have seen a lot of interest from Asianand then that will inflate our domestic yield. but not too much, so that’s the same thinking. investors — more than 30% of placementAnd I think that’s why other Swedish banks We have already done one dollar covered at times — and part of that could be becausehaven’t been in the euro market as well. bond and we would very much like to be we did this renminbi transaction, that we are a more regular issuer in the US. We have visible in that part of the world as well.What has been your strategy in senior an individual in New York doing investor Coming to investor relations, we think itunsecured issuance, where you have relations every day, meeting with potential is very important to have a professional debtlaunched four benchmarks? investors in both senior and covered. I IR team, so we have more manpower in debt We want to have a diversification, believe we are one of the few banks that has IR than equity IR at the bank. As well as ourconsidering factors such as asset that set-up. We have a 144A covered bond man in New York we have one sitting here inencumbrance. We want to have a mix between programme, which we update every quarter Stockholm whose only job is to travel in Asia.covered and senior in all of our currencies, to be ready to come to the market, so that’s in We have also been in Thailand looking atboth in dollars and euros. And when we do a our plans, to be visible in that market. a Thai baht transaction. We are always tryingsenior transaction, we are not obliged to swap to tap smaller markets for diversification, soit because we have assets in other currencies. Have you considered the 3(a)2 format for we have had discussions with the authoritiesSo it is more spread than swap sensitive when covered bonds? in Bangkok to have a green card to issue inwe do a senior transaction. In the senior space, we have a 3(a)2 Thailand as well. We are also looking long We have communicated very clearly to programme already, and we hear from term to have prudent Samurai documentationthe market that we want to be ahead of our investment banks that we save give or take in Japan, initially for senior.funding needs, so we did these transactions to 10bp-15bp. It hasn’t been clear for us that inbe well funded for the rest of the year. We are the covered space it actually pays so much Have you considered sterling?funded more than one year ahead. We have to have 3(a)2 because it isn’t clear that index In the UK the bank has a big presence onseen a tightening during the summer, but that eligibility is so much better when it comes to the street with more than 100 branches, so wedoesn’t bother us because we have done the covered. It isn’t yet clear how to set up that are actually a British bank as well. Long termdeals and you never know when the windows structure when it comes to covered because we therefore have a big interest in being anwill close. we don’t have any mortgages on our balance issuer in sterling, in senior and covered. sheet in the US. But we are looking at that The problem is kind of a luxury problem:Are your considerations regarding dollar as well. because the British banks’ ratings have fallen,issuance similar to euros? they pay more. We have done two senior in Yes, they are. We look at the all-in to the What are your plans for the Kangaroo sterling this year, but as we see it today, theSwedish currency. We are willing to pay a bit, programme you established late last year? euro and dollar markets give us better pricing. Page 3
  4. 4. Thursday, 16 August 2012 Issue 1Nordic BanksOutperforming marketexpectations in the second quarterWith a majority of European banks after some difficult years due to highhaving reported second quarter re- losses in both Denmark and Ireland. Thesults including the six major Nordic recovery which is now underway can bebanks — Nordea, Danske Bank, Han- rightfully compared to Swedbank anddelsbanken, Swedbank, SEB and DNB SEB’s Baltic venture after the financial— the divergence between regions are crisis.apparent. The results from the Nordic However, even when excluding Danskebanks surpass market expectations in Bank, the five other Nordic banks’general, while many continental Euro- results came out ahead, all well abovepean peers appear to struggle. market expectations, with SEB, DNB The table below depicts unweighted and Nordea reporting pre-tax profitsaverage line items of particular interest of 20%, 15% and 14%, respectively.from the six Nordic banks. Pre-tax profit Handelsbanken and Swedbank, beingstands out as they exceeded expectations the more defensive banks in the regionby 28%, while the results have increased and thus with less volatility in revenues,on average 36% over the last quarter and delivered results more in line.11% over the same period last year. In general, net income from financial Looking beyond the numbers one finds transactions was the main driver for the Q2that Danske Bank more than doubled its results compared with the previous year,profits, albeit from a very low level, but with few exceptions. Simultaneously,still remains well below Nordic peers, banks show weak net commissiondriving the unweighted average up. The income due to the subtle performancelargest Danish bank gained considerably of capital markets. However, traditional DNB: improving capital ratios at afrom financial transactions after the drop retail banking revenues, such as payment much quicker pacein interest rates during the quarter. Yet, commission, continue to grow on thewhat is most encouraging is the steady back of increased card usage and declines provisions amounting to only a few basisdecline of loan loss provisions following in cash handling. points. All the other big Nordic banksthe first quarter where especially Loan loss provisions have differed report higher numbers, with DanskeDenmark and Northern Ireland appear to greatly between the Nordic banks during Bank heading for a notable improvementbe in recovery mode. the last years. The Swedish banks, with 73bp reported in Q2 compared to Overall, our impression is that Danske Handelsbanken, Swedbank and SEB 93bp in Q1 and 113bp in Q4 2011.Bank continues to be on the right path are characterized by very low loan loss Loan loss provisions for DNB and Nordea are currently at 21bp and 26bp, respectively. Both national champions Summary of the big six Nordic banks suffer from problems in the shipping industry but have recently managed Deviation to increase prices to customers in this QoQ change YoY change segment. Hence, the shipping divisions from exp. remain profitable despite elevated levelsNet interest 1% 2% 10% of provisions. Nordea is also obliged to reserve capital for potential loansCommissions 1% 2% -1% in arrears in the struggling DanishNet items 17% -79% 22% economy, which also holds true for Danske Bank.Total income 5% 8% 9% Concluding this section, the single most important factor in the buoyantCosts 0% -1% 1% Nordic results stems from the positiveLoan losses -1% 17% -28% development in net interest income, which was up by 10% YoY (unweightedPre-tax profit 28% 36% 11% average). Source: Cheuvreux, Company, SME Nordic banks appear to successfully compensate for not only cyclical depositPage 4
  5. 5. Issue 1 Thursday, 16 August 2012margin pressures due to falling interest regulatory requirements and the banks’ of new capital requirements as wellrates, but also the increasing regulatory capital situations in the Nordic region are as navigating the uncertain economiccosts, with marginal increases in well ahead of most of their continental outlook due to the European debtlending. However, “the jury is still out” peers, with Switzerland possibly being crisis. DNB appears to have respondedwith regards to the increasing cost of the only exception. The fact that the quickly to its national regulator’s stricterregulation. Nordic requirements are more stringent requirements and we believe its capital and combined with sound public ratios will soon match those of itsSwedes lead on Basel III finances will assist both banks and end Swedish neighbours.Looking closer at capital adequacy customers to benefit from significantlyrequirements, Swedish regulators are at lower funding costs than in many other “The Nordic banksthe forefront of implementing enhanced countries and as a result stimulate theirBasel III guidelines of a 10% Core Tier economies. are unique in a1 ratio in 2013 and ultimately 12% in Not to forget, there is a great deal2015. All four Swedish banks are well of uncertainty in terms of size for the European context”on track to meet the requirements stated future net interest income and thus theabove and we even believe that the 12%- banks’ overall profitability. Meanwhile, On the other hand, Danske Bankmark will be accomplished by January I as a banking analyst have good faith continues to struggle due to its2013, i.e. two years ahead of schedule that the capital requirements imposed to geographical diversification, exposuresand well in advance of continental ensure financial stability can and will be to Denmark and Ireland, with whatEuropean peers. combined with healthy profitability for turned out to be expensive acquisitions Sweden’s neighbouring country in the shareholders, as the two go hand in in the economic boom leading up to thethe west is lagging, though, but with hand. Stable earnings are the first and financial crisis.Norwegian regulators speeding up the most powerful line of defence against However, it appears that there is someregulatory process DNB is improving financial instability and all the negative light in the long tunnel, our assessmentits ratios at a much quicker pace than in consequences it may have on the broader is that the recovery has started, and thatprevious years. economy. Danske Bank with a new management We are working from the assumption team find themselves in a similar situationthat the Nordic regulators are well Journey has only begun to Swedbank’s in the fall of 2009.calibrated in their view of financial The Nordic banks are unique in astability and the requirements that they European context. Overall, Swedish Mats Andersonimpose on domestic banks. The Nordic banks delivered resilient results in the Bank Equity Analystcountries’ banking sectors are highly second quarter of 2012, while at theintegrated and each country’s banking same time operating with strong balancesystem is dominated by a few large sheets.banks, implying they are systemically Nevertheless, the journey has only Research disclosures are available atimportant. Bear in mind that current begun in terms of balancing the costs www.cheuvreux.comDanske: Most encouraging is the steady decline of loan loss provisioning Page 5
  6. 6. Thursday, 16 August 2012 Issue 1Euro Nordic covered bond & senior unsecured secondary spreadsNordic benchmarks: covered versus ASW, senior unsecured (shaded) versus Z spreads. Close of business Wednesday, 15/08/12. ISIN Coupon Maturity Mid Spread ISIN Coupon Maturity Mid SpreadAKTIA XS0758309396 2.625% 20/03/2017 63bp XS0432877610 4.125% 11/06/2014 -3bp XS0540216669 3.000% 08/09/2017 59bp XS0493511603 3.000% 11/03/2015 31bp SAMBNK XS0640889803 3.125% 22/06/2016 45bp XS0565041174 2.625% 02/12/2015 13bpDANBNK XS0693226978 2.750% 19/10/2016 20bp XS0456413847 3.250% 07/10/2015 22bp XS0640463062 3.875% 21/06/2021 44bp XS0601855652 3.250% 09/03/2016 25bp SBAB XS0437056954 4.500% 01/07/2016 31bp XS0483829320 3.000% 03/02/2015 -14bp XS0501663099 3.500% 16/04/2018 45bp XS0619631624 3.375% 20/04/2016 0bp XS0469000144 4.125% 26/11/2019 53bp XS0498316255 3.250% 30/03/2017 8bp XS0519458755 3.750% 23/06/2022 56bp XS0616865688 3.500% 10/13/2014 46bp XS0431725901 4.750% 04/06/2014 110bp SEB XS0802067636 2.500% 09/07/2015 146bp XS0518441570 2.500% 17/06/2015 -11bp XS0627692204 3.875% 18/05/2016 156bp XS0580613106 3.000% 20/01/2016 -1bp XS0751166835 3.875% 28/02/2017 169bp XS0548881555 2.625% 16/10/2017 7bpDNBNO XS0614401197 4.125% 07/04/2021 29bp XS0502969388 2.750% 20/04/2015 -12bp XS0427065585 5.500% 06/05/2014 26bp XS0576372691 2.625% 11/01/2016 -2bp XS0538031211 2.500% 01/09/2015 41bp XS0691355282 2.500% 18/10/2016 5bp XS0628653007 3.750% 19/05/2016 59bp XS0478979551 3.375% 20/01/2017 9bp XS0730498143 3.875% 12/04/2017 66bp XS0728790402 2.375% 11/04/2017 6bp XS0592695000 4.250% 21/02/2018 77bp XS0537686288 2.375% 31/08/2017 9bp SHBASS XS0794233865 1.875% 18/06/2019 20bp XS0455319029 3.000% 01/10/2014 -22bp XS0637846725 3.875% 16/06/2021 28bp XS0501715311 2.750% 30/04/2015 -13bp XS0759310930 2.750% 21/03/2022 29bp XS0625427215 3.375% 11/05/2016 -1bp XS0371409292 5.875% 20/06/2013 -14bp XS0760243328 1.875% 21/03/2017 6bp XS0430768332 4.500% 29/05/2014 15bp XS0418783477 4.875% 25/03/2014 4bp XS0522030310 3.875% 29/06/2020 90bp XS0802019231 1.500% 06/07/2015 34bp XS0595092098 4.375% 24/02/2021 103bp XS0592450232 3.625% 16/02/2016 43bp XS0732513972 4.250% 18/01/2022 111bp XS0490111563 3.750% 24/02/2017 42bpLANSBK XS0732016596 3.375% 17/07/2017 37bp XS0637812313 2.625% 16/06/2014 -20bp XS0794225176 2.250% 14/06/2018 44bp XS0496605295 2.875% 23/03/2015 -3bp XS0693812355 4.375% 20/10/2021 69bpNDASS SPABOL XS0632992607 2.500% 02/06/2014 -25bp XS0519708613 2.500% 23/06/2015 -10bp XS0559068662 2.250% 16/11/2015 -11bp XS0707700919 2.375% 22/11/2016 7bp XS0672636262 2.375% 02/09/2016 -2bp XS0495145657 3.250% 17/03/2017 14bp XS0478492415 3.500% 18/01/2017 6bp XS0738895373 2.750% 01/02/2019 27bp XS0731649660 2.375% 17/07/2017 8bp XS0587952085 4.000% 03/02/2021 40bp XS0778465228 2.250% 03/05/2019 15bp XS0674396782 3.375% 07/09/2021 45bp XS0591428445 4.000% 10/02/2021 27bp SPNTAB / SWEDA XS0428007081 4.500% 12/05/2014 6bp XS0432619087 4.125% 09/06/2014 -25bp XS0590179692 3.625% 11/02/2016 43bp XS0603232165 2.750% 10/09/2014 -15bp XS0489825223 3.750% 24/02/2017 42bp XS0517421920 2.500% 15/06/2015 -7bp XS0801636571 2.250% 05/10/2017 39bp XS0673599097 2.250% 07/09/2015 -5bp XS0728763938 4.000% 11/07/2019 60bp XS0581062675 3.000% 21/01/2016 5bp XS0520755488 4.000% 29/06/2020 70bp XS0455687920 3.625% 05/10/2016 9bp XS0801636902 3.250% 05/07/2022 80bp XS0496542787 3.375% 22/03/2017 12bpPOHBK XS0491438429 3.125% 04/03/2013 -19bp XS0467956529 3.125% 19/11/2014 -15bp XS0794246925 1.750% 18/06/2015 34bp XS0517466784 2.375% 15/06/2015 -4bp XS0768453101 2.375% 04/04/2016 55bp XS0611353086 3.250% 01/04/2016 4bp XS0740788699 3.375% 09/02/2017 69bp XS0785351213 1.625% 23/05/2017 6bp TERBOL XS0646202407 3.500% 11/07/2018 16bp XS0537088899 2.125% 31/08/2015 17bp XS0429965139 4.500% 22/05/2014 35bp XS0736417642 2.250% 25/01/2017 29bp XS0497507060 3.125% 25/03/2015 42bp XS0794570944 2.000% 19/06/2019 43bp XS0576922271 3.125% 12/01/2016 51bp Source: Crédit Agricole CIB Trading, Bloomberg — See disclaimer on page 7Page 6
  7. 7. Issue 1 Thursday, 16 August 2012DisclaimerThis material has been prepared by Crédit Agricole Corporate and Investment Bank or one of its affiliates (collectively “Crédit AgricoleCIB”). It does not constitute “investment research” as defined by the Financial Services Authority and is provided for informationpurposes only. It is not to be construed as a solicitation or an offer to buy or sell any financial instruments and has no regard to thespecific investment objectives, financial situation or particular needs of any recipient. Crédit Agricole CIB does not act as an advisorto any recipient of this material, nor owe any recipient any fiduciary duty and nothing in this material should be construed as financial,legal, tax, accounting or other advice. Recipients should make their own independent appraisal of this material and obtain independentprofessional advice from legal, tax, accounting or other appropriate professional advisers before embarking on any course of action.The information in this material is based on publicly available information and although it has been compiled or obtained from sourcesbelieved to be reliable, such information has not been independently verified and no guarantee, representation or warranty, expressor implied, is made as to its accuracy, completeness or correctness. This material may contain information from third parties. CréditAgricole CIB has not independently verified the accuracy of such third-party information and shall not be responsible or liable, directlyor indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on this information.Information in this material is subject to change without notice. Crédit Agricole CIB is under no obligation to update informationpreviously provided to recipients. Crédit Agricole CIB is also under no obligation to continue to provide recipients with the informationcontained in this material and may at any time in its sole discretion stop providing such information. Investments in financial instrumentscarry significant risk, including the possible loss of the principal amount invested. This material may contain assumptions or includeprojections, forecasts, yields or returns, scenario analyses and proposed or expected portfolio compositions. Actual events or conditionsmay not be consistent with, and may differ materially from, those assumed. Past performance is not a guarantee or indication of futureresults. The price, value of or income from any of the financial products or services mentioned herein can fall as well as rise andinvestors may make losses. Any prices provided herein (other than those that are identified as being historical) are indicative only anddo not represent firm quotes as to either price or size. Financial instruments denominated in a foreign currency are subject to exchangerate fluctuations, which may have an adverse effect on the price or value of an investment in such products. None of the material, nor itscontent, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without the prior expresswritten permission of Crédit Agricole CIB. No liability is accepted by Crédit Agricole CIB for any damages, losses or costs (whetherdirect, indirect or consequential) that may arise from any use of, or reliance upon, this material. This material is not directed at, orintended for distribution to or use by, any person or entity domiciled or resident in any jurisdiction where such distribution, publication,availability or use would be contrary to applicable laws or regulations of such jurisdictions. Recipients of this material should informthemselves about and observe any applicable legal or regulatory requirements in relation to the distribution or possession of thisdocument to or in that jurisdiction. In this respect, Crédit Agricole CIB does not accept any liability to any person in relation to thedistribution or possession of this document to or in any jurisdiction.United Kingdom: Crédit Agricole Corporate and Investment Bank is authorised by the Autorité de Contrôle Prudentiel (ACP) andsupervised by the ACP and the Autorité des Marchés Financiers (AMF) in France and subject to limited regulation by the FinancialServices Authority. Details about the extent of our regulation by the Financial Services Authority are available from us on request.Crédit Agricole Corporate and Investment Bank is incorporated in France and registered in England & Wales. Registered number:FC008194. Registered office: Broadwalk House, 5 Appold Street, London, EC2A 2DA. © 2012, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK All rights reserved. Page 7