Spreads on some of the more volatile and highly leveraged companies in the European credit market tightened on Wednesday, with Alliance Boots, Wind and ProSiebenSat.1 leading the way.
Spreads were generally tighter in investment-grade credit too, as corporate results continued to prove supportive, with relatively few nasty surprises emerging in the first-quarter earnings season.
Among the movers, Alliance Boots credit default swaps were 12 basis points tighter at 160 basis points, a trader in London said, after it unveiled details of the financing for its leveraged buyout that left open the question of whether there would be any debt left outstanding that would be deliverable under credit derivatives contracts.
Alliance Boots said it would raise 9.02 billion pounds of debt to fund the acquisition, but made no mention of whether or not it would buy back its existing bonds.
Five-year CDS on Italian telecoms firm Wind fell 17 basis points to 260 basis points, another dealer in London said, after the company reported first-quarter earnings before interest, tax, depreciation and amortisation rose 11.3 percent to 428 million euros, while sales rose 10.2 percent to 1.27 billion euros.
And CDS on German broadcaster ProSiebenSat.1 tightened 12 basis points to 140 basis points, the dealer said, as the company said it would not issue a bond to finance its planned acquisition of SBS and would only use bank debt.
"Generally we've just been drifting, but there's been a firm tone in the last half hour or so," he said.
The iTraxx Crossover index, made up of 50 mostly "junk"-rated credits, was locked in its recent range, trading at 203.5 basis points by 1410 GMT.
In investment grade, telecoms names, among the most liquid in the market, were 0.5 to 1 basis point tighter, the first dealer said.
Greek telecom OTE tightened 1 basis point to 29 basis points, ignoring disappointing headlines that Greece's search for a strategic partner for its main telecoms company had met with disappointment.
"Indications we have so far on a strategic investor for OTE are not very encouraging. We have not given up," Finance Minister George Alogoskoufis told reporters.
Meanwhile, 5-year credit default swaps on Philips Electronics edged 1.5 basis points tighter, to trade at 28 basis points at 1410 GMT.
Opportunistic investment-grade issuance was the order of the day in the primary market, with US drugmaker Pfizer, a unit of giant General Electric and French utility Veolia Environment lining up quick-fire deals.
GE Capital European Funding sold a 725 million euro bond yielding 5 basis points over mid-swaps, while Pfizer was marketing a 10-year benchmark euro bond set to yield around 10 basis points over mid-swaps.
Veolia, meanwhile, is holding a call on Wednesday for a planned 15-year euro benchmark bond that is set to price before the end of the week.
In high-yield, Central European Media Enterprises was set to price a 150 million euro 7-year senior secured floating-rate note to yield around 175 basis points over Euribor, a banker familiar with the sale said.
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