Markit Recap – 10/30/2017

Venezuela – are we close to default? Waiting for a default on Venezuela’s bonds has been like waiting for Godot. Low oil prices and macroeconomic mismanagement has led to a catastrophic collapse in economic activity – our colleagues in country risk are forecasting a 7.5% GDP contraction. Civil unrest is on the rise,...

Markit Recap – 10/16/2017

Wind CDS orphaned? We noted last month that orphaned CDS seemed to be on the rise, with both EDP in Portugal and Italy’s Wind possibly losing their relationships with deliverable obligations. The picture was clear with EDP – bonds will be issued out of EDP Finance BV and this was reflected in the entity’s inclusion

Markit Recap – 9/18/2017

Toys R Us triggers CDS credit event Toys R Us became the latest CDS name to default after it filed for Chapter 11 bankruptcy protection. There have been lots of contentious credit events this year (Noble, Banco Popular, Monte to name a few) but this one was cut and dried. An auction will be held

Markit Recap – 9/11/2017

CDS orphaning risk Wind Acquisition Finance and Energias de Portugal (EDP) are two credits that appear to have little in common. One is a financing vehicle for an Italian telecoms group, while the other is a Portuguese electricity operator. There is a tenuous link – EDP is one of the world’s largest wind power producers....

Markit Recap – 9/4/2017

Hurricanes impact reinsurers Hurricane Harvey wreaked devastation across central America and the United States (particularly Texas and Louisiana), leaving an incalculable human cost. But what of the economic cost? As usual with natural disasters it will be some time before it is possible to attach a firm number. But Moody’s estimate that the total cost

Markit Recap – 8/7/2017

South Korea widens as rhetoric ramps up Donald Trump’s promise to bring “fire and fury” to North Korea if it continues to threaten the United States has certainly caused consternation across the world. But has Trump’s rhetoric affected the credit markets? In the space of a couple of days it has had an impact, though

Markit Recap – 7/31/2017

Italian banks bounce back The Eurozone has many structural flaws, inherent design failings that were painfully exposed over the last decade. Some of these have been rectified and good progress has been made on a banking union, in particular. But the work is not complete,...

Markit Recap – 7/17/2017

Senior Financials dips below 50bps Few would question the supportive role Mario Draghi has played over the last six years. Under his presidency, the ECB quickly reversed the ill-advised rate hikes in 2011 and subsequently loosened policy – the refinancing rate has been at or close to zero since 2014....

Markit Recap – 7/3/2017

Senior Financials trading tighter than Corporates The fate of corporates and the banks that serve them is intertwined; that much is clear from the past decade. But though the correlation is close, it’s certainly not one-to-one. ...

Markit Recap – 6/26/2017

Italian bank sub paper now worthless We noted last week that investors need to be aware of idiosyncratic risk and not be lulled into complacency by the languid market conditions. Monetary policy surprises were also highlighted as potential events that could disrupt the somnolent summer....