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Air France (AFFP)-Equity Gives You Wings

07 February 2014 by HCM

In a day where almost all the risk premia have gone down, it was still possible to spot a few stand out performers in the credit market. After SAS (SAS AB) announced it was stepping up its refinancing efforts with a planned issue of preferred shares and convertible bonds for a total consideration of SEK4Bln, investors suspected that AFFP (Air France - KLM) could also follow the equity raising route. That led to the its stock going down (-3.6%) and its 5 year CDS spread tightening by 30bps. The other credit outperformer was found in the TMT space: ONOFII (ONO) has reached an agreement with Vodafone for Vodafone to buy them. ONO’s 5 year CDS tightened by a further 40bps to 100bps, after an already stellar performance since the beginning of the year, as this news is only a confirmation of a deal which has been rumoured for a while.