29 January 2015 by lberuti
A couple of weeks ago, ISOLUX announced their intention to proceed with a €600mln IPO. The news was caught in the frenzy surrounding the Swiss Franc debacle and went unnoticed to anyone not specialising in High Yield. Nevertheless, the 5 year risk premium collapsed more than 150bps on the day the deal was made public. Today, after some rumours in the Spanish press that the IPO might be pulled, the company confirmed that it would not happen, not right away in any case. The market has so far proved generally resilient to the Greek situation, but the energy sector was always the most at risk for that kind of event considering the fall in oil price. On the back of ISOLUX’s involvement in solar energy, wind energy and in biofuel, it might not be that surprising that the company said it believed that the preliminary valuation indications do not recognize the full potential of the company’s asset base at this time”. That sent its 5 year risk premium through the roof, 165bps wider at 800bps. There were quite a few companies which recently told the market of their intention to raise cash by issuing stocks, and their CDS have accordingly ripped tighter. Let’s see if ISOLUX will be the odd one out or if it will just be the first to fall.