Credit Markets Update: Telecoms spreads continue widening

The cost of protection on European telecoms rose again today following the publication of a number of negative analyst reports. Traders at JP Morgan Chase in London quoted five-year credit default swaps (CDS) on France Telecom 20 basis points wider over the past two days to 340bp/360bp over Libor. Deutsche Telekom saw a similar widening on the cost of protection on its five-year debt to 230bp/250bp.

Continued bad news from key telcos in both the US and Europe created general negative sentiment, with spreads widening on most reference entities, according to traders in London. Yesterday, Goldman Sachs lowered its investment rating for Deutsche Telekom to 'market perform' from 'market outperform'. And Morgan Stanley slashed its target price on France Telecom stock to €25.3 from €34.

The equity on both names traded badly today, leading to further scepticism towards European telecoms in general

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here