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Compression Helped By VOD

11 September 2014 by HCM

2014 has been rich so far in mergers of all kinds. In an otherwise fairly calm session, it is therefore not surprising that investors can be fast to act when they hear anything pointing to a deal of some sorts. When the CEO of VOD ( Vodafone Group Plc) said today that Liberty Global Plc might be a good fit for the U.K. wireless carrier for the “the right price”, the whole Liberty sphere was set alight. VMED (Virgin Media), UNITY (UPC Holding BV) and IESYRP (Unitymedia KabelBW) were almost instantaneously 30 to 40bps, before settling 20bps, 15bps and 15bps tighter respectively. VOD on its side closed 6bps wider. In any case, there will be some hurdles to such a deal and it will not happen overnight, but it added fuel to the compression theory that has been advertised by some dealers on the back the recent ECB action. Indeed, iTraxx Main closed 0.5bps wider at 59.25bps while iTraxx Crossover closed 2bps tighter at 242bps.