Fitch Solutions: Anadarko's CDS Tighten to Seven-Year Low on Takeover Talk
NEW YORK -- June 26, 2014
Takeover speculation has helped credit default swap (CDS) spreads on Anadarko
Petroleum Corporation tighten to levels not seen since 2007, according to the
latest CDS case study from Fitch Solutions.
Five-year CDS on Anadarko Petroleum Corporation have tightened 29% over the
past month and are 64% tighter since the start of this year. Anadarko's CDS
liquidity has increased over the past three trading days, with contracts now
trading in the 14th regional percentile.
'Improved market sentiment for Anadarko of late is likely attributable to
speculation that the company may be taken over by ExxonMobil,' said Director
Diana Allmendinger. 'Also contributing to Anadarko's spread tightening earlier
this year was a litigation settlement that had been hanging over the company
for a long time.'
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.
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