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Results Do Matter After All

27 January 2016 by lberuti

Oil has grabbed most of the headlines recently, and it is fair to say that the ups and downs of the price per barrel of the WTI were responsible for a large part of the risky assets’ swings. So much so that it would be easy to forget that the reporting season is now in full swing. Ahead of the FOMC meeting tonight, credit has been generally trading sideways and the fair value of iTraxx Main and iTraxx Crossover in Europe, and CDXIG in the US only moved only moved marginally (+0.1bps, -2.4bps and +0.1bps respectively). A few names experienced wild variations though, among them TDCDC ( TDC A/S ). The Danish phone carrier reported earnings today. Cancelling the dividend - a move which triggered a collapse of the stock - to protect their investment grade status was not enough to reassure credit investors, who reacted to the revised earnings guidance – the company now expects EBITDA to fall 8.8bln kroner against market expectations of 9.2bln according to a Bloomberg analysts survey – and sent TDC’s 5 year risk premium 26bps wider to 145bps.