search   Knowledge Bank printable version
 News
 Knowledge Bank
 Deal Information
 International
 Software
 Publications
 Industry Events
 Advocacy Forums
 Links
 Site Utilities
 Contributors
 Free Offers
 Home

Click here to
Update Registration
Information

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

of use and the
Privacy Policy

Download

Best viewed in

Knowledge Bank > Financial > General
Select an area


CDS Flow Summary - Tribune sale impasse knocks CDS tighter
Informa Global Markets - CDS Morning Insight (US) (January 17, 2007)

The first few trading sessions of the new year would not be replete without leveraged buyout firms directing the whims of default swap flow. The same goes for when those leveraged buyout plans stall. Media concern Tribune had its head more than once on the chopping block, but talks of few, if any, bidders for the firm removed it from the guillotine-- at least temporarily. A CNBC report cited the possibility that Tribune may not have any suitors line up for the company as a whole. Still a spinoff of the Los Angeles unit could still be on the table.

Analysts have also cited its low stock price as a hindrance to such a deal. TRB shares today fell to USD30.51, its lowest since the summer. But its low stock price is not new to those considering bids for the firm as the USD45 a share that is talked in the market is considered too high. Default in Tribune tightened more than 15% today with trade left at 140/144 from a mid of 169 on Friday. During the session, default in Tribune dealt as tight as 137.

Other leveraged buyout candidate Black & Decker widened further to 67/71 from 64/69. Black & Decker has long struggled with its sales efforts, which bumped it to the top of LBO lists in the first place. The firm also has a long history of using up its free cash flow with share repurchases.

Homebuilders, another LBO targeted sector, managed to take further write-downs in stride. The poor housing market took its toll on Centex and KB Home today, as both said quarterly earnings were off by USD800mln. But the dire demand for housing could have hit the firms in a worse manner. Default subsequently tightened in most names in the sector by a basis point, with the high yielding names easing three basis points. Centex eased to 44/47 from 45/48, while Pulte tightened to 45/48 from 46/49. Lennar was at 54/57 from 53/58, while KB Home tightened to 168/172 from 171/174.

Some restructuring news for the auto sector hit that group in a positive light as well. Default in Ford Motor Co eased to 493/498 from 505/510, while Ford Motor Credit tightened to 264/269 from 272/277. Default in General Motors eased to 359/364 from 365/370. Financial arm GMAC tightened to 101/104 from 105/108. Other movers included paper firm Kimberly Clark which saw its CDS at 26/35 from 25/28 as it outsources IT and possibly cuts jobs.

Kathleen Fitzpatrick Hoffelder

 

 

© 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.