NEW YORK--(BUSINESS WIRE)--A series of recent asset disposals is improving credit default swap (CDS) spread movement for Vivendi SA, according to Fitch Solutions in its latest CDS case study.
Five-year CDS on Vivendi is 29% tighter since the start of the year. Additionally, credit protection on Vivendi is now trading two notches higher ('A-') then its current 'BBB' IDR.
The primary reason, according to Director Diana Allmendinger, is the recent divestiture of some of its assets. 'Vivendi is likely to wind up cash positive after selling its Maroc Telecom stake to Etisalat and French telecom unit SFR to Altice, which is boosting market sentiment,' said Allmendinger.
CDS liquidity for Vivendi has also fallen significantly. After beginning 2014 trading in the 10th regional percentile, Vivendi has slid down to 29th, signaling less pricing uncertainty.
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.
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