Post-merger fallout is leading to much wider credit default swap (CDS)
spreads for The Williams Companies, according to Fitch Solutions in its
latest CDS case study snapshot.
Five-year CDS on Williams Companies widened out 53% over the past week
and 74% over the month. The cost of credit protection on Williams' debt
jumped substantially in late-September after announcing it will be
acquired by Energy Transfer Equity, L.P. CDS credit protection for
Williams is now trending deep in speculative grade territory.
'With crude oil prices continuing to fall, more CDS market participants
may be questioning the value of a Williams/ Energy Transfer merger,'
said Director Diana Allmendinger.
Fitch Solutions case studies build on data from its CDS Pricing Service
and proprietary quantitative models, including CDS Implied Ratings.
These credit risk indicators are designed to provide real-time,
market-based views of creditworthiness. As such, they can and often do
reflect more short term market views on factors such as currencies,
seasonal market effects and short-term technical influences. This is in
contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are
based on forward-looking fundamental credit analysis over an extended
period of time.
Fitch Group is a global leader in financial information services with
operations in more than 30 countries. Fitch Group is comprised of: Fitch
Ratings, a global leader in credit ratings and research; Fitch
Solutions, a leading provider of credit market data, analytical tools
and risk services; BMI Research, an independent provider of country risk
and industry analysis specializing in emerging and frontier markets; and
Fitch Learning, a preeminent training and professional development firm.
With dual headquarters in London and New York, Fitch Group is majority
owned by Hearst.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160114005826/en/
Copyright Business Wire 2016
Source: Business Wire
(January 14, 2016 - 10:26 AM EST)
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