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Will They Or Won’t They?

20 April 2016 by lberuti

Activity was understandably timid ahead of tomorrow’s ECB meeting and the market had to feed on crumbs in terms of news. The tone was generally positive though, and the appetite for buying protection felt limited to say the least. VUECIN (Vougeot) was among the odd-one-outs though. On Monday, the cinema chain was rumoured to be working on a LSE listing in 2017. Press articles went as far as mentioning PwC as advisors on the float and a GBP1.7bln valuation was put forward, and VUE’s 5 year CDS was marked 38bps tighter on that day. This morning, while they reported Q1 2016 fiscal results which were encouraging with increases in average ticket price, retail spent per person and screen advertising, the company also mentioned during their call that they are not currently contemplating an IPO. Investors used this as an excuse to consolidate part of the 80bps tightening that we have seen over the last week and a half and sent VUE’s 5 year risk premium 20bps wider at 324bps.