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Rien Ne Va Plus…

19 March 2014 by HCM

During a session where most assets have traded sideways, it took some specific pieces of news to move risk premia. Wimpelcom announced its plan to improve WINDIM (Wind Acquisition Finance) capital structure by repaying its PIK and issuing €800m of senior debt from WINDIM. The news of the issue of a bond deliverable into WINDIM CDS sent the 5 year risk premium 50bps wider (2.5% in cash price) and made it one the bright red spots. The other one is LADLN (Ladbrokes Plc) which widened by almost 30bps in the wake of the UK budget announcement, which included an increase in fixed-odds betting terminals’ (or FOBT, aka slot machines) taxation to 25%. Considering the equity plunge (-13.9%), one could argue that the 5 year CDS was well behaved.