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"bolsita1"]Press Release: Fitch Solutions: Alleged Scandal Sends Petrobas' CDS to Widest Level since 2009
Last update: 17/11/2014 5:16:40 pm
The following is a press release from Fitch Ratings:
Fitch Solutions-New York-17 November 2014: Alleged improprieties among some of Petroleo Brasileiro SA's (Petrobras) senior management has led to credit default swap (CDS) spreads reaching levels not seen in over five years, according to Fitch Solutions in its latest CDS Case Study Snapshot.
Five-year CDS on Petrobas widened 21% last week to their widest levels since early-2009. After pricing consistently in 'BB-' territory, credit protection on Petrobras' debt is now pricing in line with 'B-' levels. After seeing a drop-off throughout late summer, CDS liquidity for Petrobras has rebounded since October, up to the 16th regional percentile from 36th.
'Petrobras' growing market concern likely stems from an alleged money laundering and bribery scheme that led to the arrests of two senior executives,' said Director Diana Allmendinger. 'Petrobas has also delayed its third quarter earnings announcement, which is also likely worrying investors.'
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 at '
www.fitchsolutions.com'.