search   Knowledge Bank printable version
 Knowledge Bank
 Deal Information
 Industry Events
 Advocacy Forums
 Site Utilities
 Free Offers

Click here to
Update Registration

Please be advised that the use of ®
is subject to the
Terms & Conditions

of use and the
Privacy Policy


Best viewed in

Knowledge Bank > Financial > General
Select an area

EUR CDS Flow - Telcos head south as bid lists do the rounds
Informa Global Markets - Bondwatch Morning Insight (Europe) (October 20, 2006)

Bid lists were doing the rounds in the TMT sector pulling "everything tighter" according to contacts. However, standing out amidst the general 1-2bp tightening in the sector, protection on Telecom Italia was firmer after news that investors including Pirelli & C, Mediobanca and Generali have formed a "pact" which extends control of the Italian phone company to protect from a potential takeover. This, together with Wednesday"s media reports that the company will not sell its mobile arm, added to the effect of the bid lists and pushed 5Y CDS on the Italian phone company to 63/67 (-4). 5Y CDS on Pirelli, Mediobanca and Generali were all unchanged at 120/140, 7/11 (senior) and 7/9 (senior), respectively.

Elsewhere, STMicroelectronics firmed to 37/42 (-7). Contacts put this down to one account looking to do a deal in large volumes and being met with a reluctance in the market to take the risk of a position. In addition, a Bloomberg survey suggested that the STMicro may post Q3 profit more than double that of last year to USD 193mln. Meanwhile, Deutsche Telekom priced its 7Y benchmark at the top end in terms of size (EUR 1.5bln) and at the tightest end of the revised price guidance range (mid-swaps +67bp). 5Y CDS in on the Teutonic telco was quoted at 41/44 (-1) with 7Y quoted at 55/59.

In the Consumer sector, 5Y CDS on Cadbury Schweppes edged tighter to 31/34 (-1) after the company"s announcement late on Wednesday that it will cut up to 450 jobs at its factory in Dublin, Ireland in an effort to reduce costs. The company may invest up to EUR 100mln as part of the restructuring. Elsewhere, 5Y CDS on Safeway was noted trading at 35 early in the AM in a market of 34/37 (-). 5Y CDS on PPR was also active at 51 and was quoted at 49/52 (-) after Carrefour denied media rumours by saying it has no interest in buying Fnac - PPR"s least profitable unit. 5Y CDS on Carrefour remained unchanged at 13/15. 5Y CDS on Unilever traded at 15 and crept wider to 15/16 (+1). De Financieele Telegraaf reported that Unilever shareholders may sue the company for mismanaging the conversion of preference shares into ordinary stock. On the earnings front, Nestle posted a 9.1% Y/Y rise in 9-month sales, though later said that it sees 2007 sales growth at the "lower end" of its target range. 5Y CDS was unchanged at 3/6.



© Copyright 2014. The Mayer Brown Practices. All rights reserved.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

Legal Notices | Attorney Advertising | Site Index | Contact Webmaster

*The site links listed on this web site are for reference use only.
The firm does not necessarily sponsor, endorse or verify the accuracy of the content contained in any of these sites.