Telco bond issues spark flurry of activity in credit markets

While cash trading dominated activity, telco credit derivatives trading was brisk, with clients shorting risk as they bought protection. The five-year credit protection cost for France Telecom widened about 28bp since the bond issue to 293/303bp at the end of trading today. Deutsche Telecom credit default swaps ended the day at 237/247bp, around 25bp wider since its bond issue.

But traders noted there was little trading in credit default swaps compared with volumes in bonds. Investors rushed

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