Credit-default swaps spreads on HeidelbergCement narrowed last week as investors were re-assured by the completion of the company's re-financing initiative. Spreads tightened last to 375/355 basis points from 410/390bps. Trading was subdued and from a mixture of hedge funds, proprietary desks and asset managers.
HeidelbergCement announced its interim results the week before and re-iterated that it had completed its refinancing. In July, the company announced it was raising EUR404 million (USD457 million) from equity, EUR700 million from a high-yield bond and had a new syndicated credit facility of EUR1.5 billion.
Standard & Poor's rates HeidelbergCement BB plus and Moody's Investors Service has it Ba1. Both ratings are on negative watch. Wolfgang Draack, senior v.p. at Moody's in Frankfurt, said, "We have a negative outlook because we are concerned about the challenging German market place which is facing intense pricing pressure." Draack added that the business usually performs better in the second half of the year and that it was particularly important that this happened this year.
Credit-default swap spreads on other European construction companies such as Saint-Gobain, Lafarge and Hanson did not tighten in response.
Five-Year Credit-Default Swap Spreads On HeidelbergCement