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It Was Not Trump

16 November 2016 by lberuti

On the 9th November HEIGR’s ( HeidelbergCement AG ) 5-year risk premium had one its best day of the last 6 months. On that day, the company reported its third quarter results and, despite a miss, reassured somewhat investors when it confirmed guidance for the full year. It was not the reason behind the tightening of its 5-year CDS though. Neither was it due to the shock results of the US elections which catapulted to power Mr Trump and his $500Bln construction goal. On that day, HEIGR was assigned an investment grade rating by S&P. Investors did not spend too much time reading the rationale of the upgrade. They merely factored in the price of its debt the fact that going forward it would be eligible to the ECB Corporate Sector Purchase Program. The presence of that newfound buyer made all the difference.