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30 January 2020 by jbchevrel

Carnival Corporation (CCL) owns and operates cruise ships offering cruises to all major vacation destinations. It also owns and operates hotels. Today as the US came in, CCL 5y CDS was the worst-performing single-name in the CDX IG s33 index; it opened at 70bp mid (+21) on our monitor but with wide bid-offer (~8bp) and the stock opened down -6%. A cruise ship from CCL was reported to have ~7,000 passengers on board, blocked from leaving an Italian port (Civitavecchia, near Rome), after a passenger (54-year-old woman from Macau) experienced potential corona virus symptoms. The fact that diseases can quickly flourish among cruise ship passengers because of their proximity in a closed space justified the measure. Then the 5y CDS reverted to close at 55.5 (+6.5) on our London close. This was after some preliminary medical reports indicated that the virus was not present. Civitavecchia’s mayor called for a continued lockdown of the boat waiting for full tests. After our close, this headline just hit us *ITALY CRUISE SHIP PATIENT TESTS NEGATIVE TO VIRUS: OFFICIAL. Elsewhere in our space, the spreading of the corona virus caused more risk-off price action. All indices closed wider, with CDX IG (+2) under-performing Main (+1). Similar relative move as the one discussed last Jan 24. As I am writing the WHO conference has been delayed to 19:30 London time. They are set to announce their decision over whether or not to declare a global health emergency state.