Fitch Solutions: LBO Talk Sends Computer Sciences' CDS Out 81%

NEW YORK--()--Talk of a possible leveraged buyout has sent credit default swap (CDS) spreads for Computer Sciences Corporation to its widest level in nearly two years, according to Fitch Solutions in its latest CDS Case Study Snapshot.

Five-year CDS on Computer Sciences widened 81% yesterday. Spreads for CSC are now at the widest levels since early 2013. 'After pricing consistently in line with 'BBB' levels for the past six months, credit protection on Computer Sciences' debt is now pricing in below investment grade space,' said Director Diana Allmendinger.

CDS liquidity for the IT services provider remains high, trading in the second global percentile. 'Increased market concern for Computer Sciences has likely been sparked by speculation that the company may be in leveraged buy-out discussions with private equity firms,' said Allmendinger.

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

Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content.

Fitch Ratings and Fitch Solutions are part of the Fitch Group, a jointly-owned subsidiary of Fimalac, S.A. and Hearst Corporation. For additional information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com'; 'www.fimalac.com' and 'www.hearst.com'.

Contacts

Fitch Solutions
Diana Allmendinger, +1 212-908-0848
Director
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Solutions
Diana Allmendinger, +1 212-908-0848
Director
Fitch Solutions, 33 Whitehall Street, New York, NY 10004
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com