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Accelerating Tighter

16 September 2020 by jbchevrel

TUI AG CDS was the best performer in XO space today. The CDS was tighter by about 4 points, closing in 2%/4.5% context on our end (ie 584bp mid). This notable move came after it was reported by the German newspaper HB that TUI plans to raise €1b in fresh equity in the coming weeks. The equity holders lost -5% today, TUI market cap being left a tad above €2B at the close today. The details are meant to be finalised by the end of September, according to the report. Alexey Mordashov (TUI’s largest shareholder / 1st-generation oligarch from early 90s) reportedly plans to invest €0.3B in the deal. Next milestone on the name, we will get the trading update on Tuesday next week. Elsewhere, the new version of XO (without Matalan Finance) was a bit less than a point richer as a result of the exit. Brexit-wise, the more compromising tone of PM Boris appeased UK-linked risky assets on the day. All eyes on the Fed at present. Not a big reaction to the communique, with nothing surprising, but the presser is starting at 1930 Ldn.