Telstra Credit Protection Prices Fall

  • 05 Feb 2001
Email a colleague
Request a PDF

Five-year credit default swap spreads on Australian telecom company Telstra Corp. tightened last week, partly on the back of a positive change in sentiment among equity analysts, said traders in Sydney. Five-year credit default swaps on Telstra traded twice Monday at 67 basis points and 68bps, compared with Jan. 19, when it traded at 73bps, traders said. Telstra's capital expenditure seems to have bottomed out recently, according to analysts' reports, helping its stock rally to AUD7.12 (USD3.93) last week from a low of around AUD6 in August, one trader noted.

Robert Hook, an equity analyst at National Australia Bank in Melbourne, said Telstra's share price was fairly healthy last month. Sentiment has improved partly because the amount it is due to pay in its strategic alliance with Pacific Century CyberWorks was revised and effectively reduced in December, he said. Telecom company stock values have recently improved globally though, he added. Telstra's next earnings report is in early March.

Five-year credit default swaps on Telstra were trading at around 40-50 basis points in September and October, shortly after its stock plunged to around AUD6 per share, a trader said. Pricing on the credit then increased steadily and came close to touching 75bps by year-end, he added.

More offers for protection than bids have appeared in recent weeks, as investors are becoming more comfortable with the credit, traders said.

Pierre Katerdjian, global credit swap trader at Deutsche Bank in Sydney, argued though that while a credit's share price is often a factor in the pricing of protection on it, a general improvement this year in sentiment toward telecom companies globally had driven the drop in protection prices on Telstra.

  • 05 Feb 2001

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%