Negative Results, Possible Downgrade Blows Out Fiat Spreads

  • 20 May 2002
Email a colleague
Request a PDF

Credit-default swap spreads on Fiat widened approximately 80 basis points in the beginning of the week for both five-year and two-and-a-half year protection after the Italian car manufacturer posted a larger than expected net loss for the first quarter on Monday. Swap spreads were trading at 450bps/480bps for five-year protection and 480bps/530bps for two-and-a-half year protection by last Wednesday. Traders said convertible arbitrage funds were big buyers of protection in the two-and-a-half-year portion of the curve to match Fiat's outstanding convertible offering. One trader estimated EUR50-100 million (USD 4.5-9.13 million) traded from Monday to Wednesday. Typically volumes would be in the low end of that range.

"The big concern is whether the company gets downgraded to below investment grade," said Juan Carrion, fixed-income analyst at Barclays Capital in London. Moody's Investors Service rates Fiat Baa2 and Standard & Poor's rates it at A3, both have Fiat on negative watch. Carrion said the company is doing everything it can to increase investor confidence and there are rumors in the market of a possible cash infusion from General Motors. If Fiat did get a cash injection it would probably ward off a downgrade, according to Carrion.

If Fiat does get downgraded to junk status, credit-default spreads would probably widen more, despite the fact that the credit is already trading as if it were non investment-grade, Carrion said.

  • 20 May 2002

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 253,106.92 930 8.89%
2 JPMorgan 230,914.50 1036 8.11%
3 Bank of America Merrill Lynch 221,389.46 762 7.78%
4 Goldman Sachs 171,499.26 554 6.03%
5 Barclays 169,046.60 646 5.94%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 21 Jul 2017
1 HSBC 25,385.87 103 7.10%
2 Deutsche Bank 25,125.19 81 7.03%
3 Bank of America Merrill Lynch 22,023.57 59 6.16%
4 BNP Paribas 18,766.65 109 5.25%
5 Credit Agricole CIB 18,157.63 105 5.08%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • 18 Jul 2017
1 JPMorgan 12,578.87 55 8.17%
2 Citi 11,338.07 71 7.36%
3 UBS 10,682.06 44 6.93%
4 Goldman Sachs 10,419.53 53 6.76%
5 Morgan Stanley 10,194.88 57 6.62%