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Norway Junk bond investors set oil sight on attractive oil debt

Norway Junk bond investors set oil sight on attractive oil debt

OSLO: Norway’s junk bond investors see oil debt as an opportunity, provided you’re patient and picky.

Volatility in the global markets has created a liquidity squeeze, with widening spreads for oil-related bonds offering “good payment for the credit risk,” said Roar Tveit, a portfolio manager at Holberg Fondsforvaltning AS.

“We’re rather on the buyer’s side,” he said in an interview in Oslo on Thursday. “Our primary analysis is that we buy companies that will survive this downturn. Some of these companies offer very attractive credit risk premiums right now.”

The Norwegian junk bond market plunged along with oil prices in July, with the DNB High-Yield Norway Total Return Hedged Index falling 8 percent since then. Crude prices have now recovered some, rising around 11 percent from the end of September. But oil bonds have continued to suffer.