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Is Liberty A Step Closer?

29 November 2017 by lberuti

It was another strong session in European credit, and particularly in the Crossover space. The sentiment was positive from the word “go” on the back of the strong end to the US session, but the market gained momentum as a string of positive news benefitted a number of single name corporates. There were headlines in the press that Liberty Global would be working on a potential disposal of UPC Switzerland and UPC Austria, its operations in the two countries where Vodafone does not operate. These assets would play no role in the potential merger between Vodafone and UPC, which would seek massive cost savings and strategic advantages by combining mobile and fixed-line networks. Selling them would leave UPC with only Central and Eastern European assets in Poland, Hungary, Czech Republic, Romania and Slovenia. Some investors view it as a further effort in a series of manoeuvres aimed at making the two companies’ networks a better fit for each other, increasing the odd of a merger. They marked the risk premia of all the companies belonging to the Liberty Media complex tighter: VMED (Virgin Media) was 11bps at 188bps, ZIGGO was 10bps tighter at 169bps, UNITY (Unity Media) was 9bps tighter at 129bps and UPC was 20bps tighter at 155bps.