Fitch Solutions: CDS Rebound 20% for JP Morgan; 25% for BofA

NEW YORK--(BUSINESS WIRE)--JP Morgan Chase & Co. and Bank of America (BofA) kick off the earnings season on a higher note than in past quarters, according to Fitch Solutions in its latest weekly earnings commentary.

CDS on JP Morgan (reporting Wednesday) tightened 20% over the past three months, outperforming the broader North American banking sector. CDS on JP Morgan are currently pricing in line with 'A' entities (two notches above historical trading levels). CDS liquidity for JP Morgan fell from trading in the 24th regional percentile to the 33rd. 'Credit markets appear to be more certain of JP Morgan's future prospects,' said Author and Director Diana Allmendinger.

While CDS on BofA (reporting Friday) have rallied 25% over the past quarter, the markets' view of the bank remains a bit more precarious. Spreads are still trading at 'BBB-' levels, which is five notches lower than BofA's current long-term rating. 'Wider spread levels may be partly attributed to continued concerns surrounding troubled home loans BofA took on through its 2008 acquisition of Countrywide,' said Allmendinger.

Bank of America Corporation (FINANCIALS/Banks)

Credit spreads have tightened over the last three months, with the five-year point tightening from 176 basis points (bps) to 132 bps, a decrease of -25%. The liquidity score on Bank of America Corporation decreased from 7.16 to 7.1 over the three-month period, causing a decrease in liquidity from trading in the 1st percentile to the 7th percentile.

JPMorgan Chase & Co. (FINANCIALS/Banks)

Credit spreads have tightened over the last three months, with the five-year point tightening from 86 bps to 69 bps, a decrease of -20%. The liquidity score on JPMorgan Chase & Co. decreased from 8.13 to 7.83 over the three-month period, causing a decrease in liquidity from trading in the 24th percentile to the 33rd percentile.

Hasbro Inc. (CONSUMER GOODS/Leisure Goods)

Credit spreads have tightened over the last three months, with the five-year point tightening from 172 bps to 141 bps, a decrease of -18%. The liquidity score on Hasbro Inc. decreased from 8.05 to 7.68 over the three-month period, causing a decrease in liquidity from trading in the 24th percentile to the 27th percentile.

SuperValu, Inc. (CONSUMER SERVICES/Food & Drug Retailers)

Credit spreads have widened over the last three months, with the five-year point widening from 719 bps to 726 bps, an increase of 1%. The liquidity score on SuperValu, Inc. decreased from 7.75 to 7.32 over the three-month period, causing a decrease in liquidity from trading in the 11th percentile to the 14th percentile.

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