Corporate bonds slip as Ford reports loss

European corporate bonds slipped slightly on Thursday as auto bonds drifted lower in value after Ford reported a fourth-quarter loss.
Telecom bonds were little changed in subdued trading after mobile phone giant Nokia beat earnings expectations.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 58.5 basis points more than similarly dated government bonds at around 1545 GMT, 0.3 basis point more on the day.
"Ford was about two wider on the day," said one trader. "It's very quiet - autos are drifting weaker."
Ford Motor Co on Thursday reported a larger net loss for the fourth quarter, as the cost of job cuts in Europe and a restructuring of its spin-off deal with former parts arm Visteon Corp offset improved auto and finance unit results.
Ford said it lost $793 million, or 43 cents a share, in the quarter, compared with a net loss of $130 million, or 7 cents a share, in the same period a year ago.
The trader quoted Ford's 5.75 percent 2009 euro bond bid at 155 basis points over government bonds around 1520 GMT, one to two basis points wider on the day.
Telecom bonds were little changed after the world's top mobile phone maker, Finland's Nokia, posted quarterly earnings at the top end of estimates on Thursday thanks to strong demand for phones and networks.
"The reaction today was pretty muted," said one trader"
Telecoms equipment makers were hit by some profit taking, he said, but that was due rather to a rally in the first weeks of the year than any knock-on effect from Nokia.
Nokia does not have any bonds outstanding but its results often impact borrowers in the sector such as Sweden's Ericsson and France's Alcatel.
The cost of credit protection on Ericsson and Alcatel rose slightly on the day.
Five-year default swaps on Ericsson were quoted at 188 basis points around 1544 GMT, the trader said, meaning it costs 188,000 euros to insure 10 million euros of debt against default. The price has fallen from around 215 basis points at the start of the year.
Alcatel swaps were quoted at 175 basis points, meaning it costs around 175,000 euros to insure 10 million euros of Alcatel debt.
In the primary market, French holding Wendel Investissement on Thursday priced a 500 million euro seven-year bond, the banks managing the sale said.