Our Experts Comment the Times Series

See All the Comments

From bad to worse

17 August 2015 by pdonnat

We pointed out in our blog the 22nd of July a brutal widening of BOMB ( Bombardier, Inc. ) credit default swap price. Since then, the CDS kept widening from 8% to 12% in a parabolic acceleration as you can observe on the grapple. When the doubt comes, a spiraling selling pressure pushes debt prices down. The movement stops when the credit trades as distressed, the residual asset value post a credit event . The company is asking for time to deliver its reorganization. We do love their Canadair and their nice trains. This is not sufficient for investors looking at an impressive cash flow burn rate. Rumors surfaced in the market that the liquidity is too short for turning around the company. The management should look for a B plan.