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WINDIM (Wind): Chain Reaction

04 June 2014 by HCM

Credit had its usual grind tighter day, as the market is bracing itself for the ECB meeting tomorrow. The tone is quite bullish across the board, but moves were generally fairly contained. It took an overnight Reuters article to set things in motion in the European telco space. According to their sources, Hutchison Whampoa has resumed talks with Vimpelcom, the Russian telecom group, over merging their Italian mobile companies. These talks have been rumoured to be on and off over the last 6 months, with their reported break earlier in the year leading to a 150bps widening of WINDIM’s 5 year risk premium. This time, the clearance of Hutchison’s O2 Ireland acquisition, together with the recent partial refinancing of Wind’s debt, seems to create a new momentum for the deal to happen. On the back of that, the 5 year CDS of WINDIM was almost 90bps tighter at the end of the session. As is often the case, other possible concentration candidates in other regions joined the party, notably PFOURS (Play Finance) which closed 20bps tighter by sympathy.