Credit Market Update: Buyers of protection pull back bids for European credits

Buyers of protection have pulled back their bids in the European credit default swap market this week, in response to positive market news and sentiment, coupled with greater stability on the equity markets.

Credit default swaps on Dutch telecom company KPN, which has just release promising second-quarter results, came in 25 basis points (bp) yesterday, trading at 275/305bp today. “We are seeing some more positive news for the telcos following the battering these credits have seen in recent months,” one London-based credit derivatives trader said. "The spreads could easily come in further if this positive market sentiment continues.”

Credit protection for Deutsche Telekom and France Telecom

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