26 June 2015 by lberuti
Recent sessions have seen compression of all kinds. At a macro level iTraxx Crossover has outperformed iTraxx Main for instance. But that was also true at a micro level, and the tighter risk premia have moved slower than the wider ones during the tightening that took place over the last week. And among the names which have resisted the most to that move, telco companies were notable underperformers. It was quite tricky to get hold of good offers for protection across the sector and today only confirmed this. TMT has been a fertile ground for M&A recently, but it has mainly affected the High Yield space. Investors seem to anticipate consolidation involving investment grade companies going forward. Their fears (maybe hopes?) were confirmed to a certain extent earlier in the session when the CEO of Altice told a newspaper that KPN (Ladbrokes Plc) could be on their menu. If the market keeps on rallying, TMT names might not play catch for a while.