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02 December 2015 by lberuti

It looks as if the risk premium of Brazil has eventually stabilised after a few rocky sessions. The 450bps level, which has (sort of) capped any widening attempt over the last couple of months, is proving difficult to break. That most likely helped the Spanish banks which have also stabilised. The same cannot be said for RALFP’s ( Rallye SA ) and COFP’s ( Casino Guichard Perrachon SA ) which saw their risk premia widened today by another 29bps and 12bps respectively . RALFP keeps suffering from the continued weakness in Casino’s operations which are among the most exposed to Brazil headwind in the European corporate universe. PORTEL (Portugal Telecom) has actually been the most impacted and its 5 year CDS, which is quoted upfront (the perceived credit risk is high enough for investors to ask to be compensated upfront when they accept to provide insurance on PORTEL’s debt), is back to its widest level ever at 36.25% + 500bps running, as bonds were trading down 6 to 10 points.