20 May 2015 by lberuti
As expected, on the day of expiry of credit index options, large gamma positive positions made for tight trading ranges on iTraxx Main, iTraxx Crossover and CDXIG. But it did not mean that the market was dead, and actually some parts were actively traded. The TMT sector for instance saw plenty of news and plenty of activity. There were confirmed news like the acquisition of Suddenlink, the US cable operator, by ALTICE in a deal valued at $8bln. They will issue $1.7bln of new debt and target a 5x leverage in the short to medium term. There was also speculation that they are interested as well in TWC. This combo sent ALTICE’s 5 year risk premium 17bps wider at 371bps (that of NUMFP – Numericable – duly followed suit). Of course, there was also the declarations of Mr Malone who said Vodafone would be a great fit for Liberty and that a combination would be the “promise of creating enormous shareholder value if we could work it out”. That sent the Liberty complex on the move with IESYRP (Unity Media) and VMED (Virgin Media) both 10bps tighter at 164bps and 181bps respectively, while VOD (Vodafone) was 9.5bps wider at 78bps.