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ArcelorMittal: Marching Tighter

11 April 2016 by lberuti

Despite a weak open in credit land - especially indices -, the session eventually proved resilient for corporates and the day turned into a slow grind tighter even as stocks had their moments of weakness towards the end of the afternoon. In Europe, the best performing names were found among the high betas, and more specifically in the basic material sector after MTNA ( ArcelorMittal SA ) announced they will buy back bonds after raising $3bln earlier this year in a right issue. They will repurchase €1bln of notes maturing in November 2017, and €500m due in March 2018. They also offered to buy back $1.5bln of securities maturing in June 2018. The levels at which MTNA will buy their bonds are substantially above the levels at which they were trading in the secondary market which left a few people scratching their heads, considering their already tight risk premia. In any case, investors took it positively and they sent the 5 year CDS at its tightest level (584bps) since the March roll, enabling MTNA to resume its impressive march tighter since the beginning of the year.