Fitch Solutions: RadioShack's CDS Come Out 70%; At Widest Levels Ever
NEW YORK -- August 6, 2014
RadioShack Corporation's increasingly precarious financial standing is
reflecting in its credit default swap (CDS) spreads, now trading at their
widest-ever levels, according to the latest CDS case study from Fitch
Five-year CDS on RadioShack have widened 70% over the past month, with much of
the widening happening over the past week. 'Markets appear increasingly
concerned over RadioShack's weak sales, which is likely why CDS has come out
so significantly in such a short period of time,' said Director Diana
Further evidence of RadioShack's struggles is in its dwindling CDS liquidity.
After trading within the top tenth global percentile through March of this
year, CDS on RadioShack are now trading in the 65th percentile. 'The drop in
RadioShack's CDS liquidity is likely indicative of trader apprehension to
enter into positions at such wide spread levels,' said 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.
Additional information about Fitch Solutions' products is available in the
Fitch Solutions, a division of the Fitch Group, focuses on the development of
fixed-income products and services, bringing to market a wide range of data,
analytical tools and related services. The division is also the distribution
channel for Fitch Ratings content.
Fitch Ratings and Fitch Solutions are part of the Fitch Group, a jointly-owned
subsidiary of Fimalac, S.A. and Hearst Corporation. For additional
information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com';
'www.fimalac.com' and 'www.hearst.com'.
Diana Allmendinger, +1 212-908-0848
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
Sandro Scenga, +1 212-908-0278
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