Rise in LBOs sparks insider dealing fears

Credit derivatives traders could be profiting from insider information on transactions in the leveraged buyout and M&A sectors, according to a report published by Credit Derivatives Research.

The US research provider notes that CDS prices on 30 takeover targets rose before the transactions had been made public. This includes four out of the five largest LBOs in 2006. The report highlights Freescale Semiconductor, Sara Lee Corp and Knight Ridder as companies whose CDS saw the most activity.


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