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Another Change In Wind Direction

08 June 2016 by lberuti

Today was the day where CSPP kicked off. That initially gave a positive tone to the credit market which lasted until mid-afternoon when the euro began to strengthen. That sent credit indices into reverse and they finally closed unchanged across the board. One name which participated in the early rally never looked back though. WINDIM (Wind) saw its 5 year risk premium tighten dramatically from 498bps to 453bps for reasons that have nothing to with the ECB buying bonds. This was all due to a story that came out late last night that suggested parties could be interested in buying redundant wireless frequencies and towers to create a 4th operator in Italy. This would go a long way toward alleviating concerns of the regulator. By lining up buyers, Hutchison’s 3 Italia and Vimpelcom’s Wind are trying to avoid a repeat of last month, when the EU vetoed the merger between O2 and 3 in the UK. As investors are getting more bullish about a deal getting through, WIND’s 5 year CDS’s is changing path yet another time.