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ALOFP’s Fate Is Now Sealed

23 June 2014 by HCM

With credit indices trading sideways for most of the session (even though with a weakfish tone until the release of US home construction figures), some idiosyncratic news was need to push a name one way or the other. While WINDIM’s 5 year risk premium was 16bps wider after it announced a $5.5bln multi tranche deal to refinance debt, the 5 year CDS referencing ALOFP (Alstom SA) was 6bps tighter. During the week-end, GE (General Electric Company) was endorsed by the French government (they had already won Alstom’s board’s heart some time ago) as their preferred bidder. That brings an end to a bidding contest which investors feared could drag for much longer. The exact structure of the deal and the eventual leverage of ALOFP going forward is not 100% clear, but an investment grade rating at some later stage is now taken for granted.