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Thanks, But No Thanks.

21 March 2018 by lberuti

Today felt quieter than yesterday. Investors are still adjusting positions after the roll, moving some of them to the newly issued “on-the-run” contracts. Days where members of the Fed meet to decide on rates at the end of the session are never the busiest anyway. It did not prevent a few outsized moves though. The most spectacular certainly affected JWN (Nordstrom, Inc) after the company decided to end definitively its discussion with members of the Nordstrom family regarding a possible buyout deal. While the news negatively impacted the stock - it was down 2% -, it greatly benefitted the CDS which was 118bps tighter at 190bps. The latter is back to its June 2017 level, when the whole story started, after having traded as wide as 370bps. Taking a company private usually implies taking on big amount of additional debt, and credit investors are always getting nervous when the words “LBO” or “MBO” are pronounced.