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The Tide Lifts (Almost) All Boats

18 February 2015 by lberuti

Looking at the price action since the beginning of the week, the market seems underinvested, and today credit outperformed other asset classes on no new news. The price action on European High Yield cash is still a bit timid, but the rally gained traction on most single name CDS. Even PEUGOT (Peugeot SA) which announced disappointing results saw its 5 year risk premium closing 8bps tighter at 168bps. On a day like today, anything with beta had to rally, and OTE (Hellenic Telecommunications Organization S.A.) led the charge, closing 30bps tighter at 462bps. Only a handful of names resisted the move. The most notable two were NSINO ( Norske Skogindustrier ) which is still struggling to get its bondholders agree to its debt swap, and NUMFP (Numericable SFR SA) in which ALTICE has proposed to buy the 20% stake still held by VIVFP (Vivendi SA). This operation will require some debt issuance and investors suspect it will come the NUMFP box.