NEW YORK--(BUSINESS WIRE)--Amid slumping retail sales overall, Lowe's Companies Inc. is emerging as a bright spot as evidenced by its tightening credit default swap (CDS) spreads, according to Fitch Solutions in its latest CDS Case Study Snapshot.
Five-year CDS on Lowe's tightened 28% over the past month to price at the tightest levels in seven years. After pricing at 'AA+' levels for much of the past year, credit protection on Lowe's debt is now pricing in 'AAA' space.
"Improved investor confidence for Lowe's can likely be attributed to strong fiscal third quarter results and slightly higher full-year guidance thanks to more home improvement spending overall," said Director Diana 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.
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