Pilkington CDS swing in latest deliverables panic

Yahoo Asia reported that credit default swaps on Pilkington were volatile on Thursday amid speculation the British glassmaker's imminent takeover may prompt corporate action that cuts the value of its default protection.

The concern follows a controversy this week over Britain's Rentokil , where it was discovered that the company's default swaps did not cover new debt issued by a distinct entity.

The cost of insuring against a default by Pilkington swung between 55 and 67 basis points on Thursday morning.

"The question of deliverables is a hot issue at the moment. People are spooked by Rentokil, and there's a lot of other names in the frame as well," said Rick Mattila, credit analyst at Dresdner Kleinwort Wasserstein.

The question hinges on whether Pilkington will provide a guarantee for debt financing following its takeover by Nippon Sheet Glass . If there is no guarantee, and with just one 2008 bond outstanding, the cost of default insurance will fall because of the slim chance of a default on the single short-dated bond.

"There is also a fear that Pilkington may buy back its euro bond," said an analyst in London.

A spokesman for NSG said the company had not yet made a decision on a buyback.

On Wednesday, credit default protection on British services group Rentokil Initial fell sharply as investors realised a 10-year sterling note would be sold out of a new company formed last year, cutting the value of existing insurance.

Read the entire article on the source link.

600450 Pilkington CDS swing in latest deliverables panic glassonweb.com

See more news about:

Others also read

Pilkington United Kingdom Limited, part of the NSG Group, has signed up four new dealers to supply Pilkington Spacia™ to customers across the UK.
"Right product, right place" - this is the motto of the NSG Group's trade fair presence at BAU 2019.
At this year’s FENSTERBAU FRONTALE, Peter Schober, who heads the Department of Structural Engineering and the Windows Division of Holzforschung Austria (HFA) in Vienna, discussed his latest research in the area of “vacuum glass”.
Pilkington United Kingdom Limited, part of the NSG Group, has launched Pilkington Optimirror™ Protect Plus, a new safety mirror that provides enhanced safety capability without the need for secondary processing.
Topglass has completed works on project Bon Secours for Nautic.
The Charnock Bradley Building is the centrepiece of the University of Edinburgh’s expanding Easter Bush Campus eight miles south of the city.

From industry

Add new comment