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Wednesday, 08 November 2006
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CDS Insight
Morning Insight
(US Edition – Updated 08:00 EST)
Today’s Top Stories
What’s HOT in Credit?
• Clear Channel eyed by France's JCDecaux
• Ratings
- Valero, Computer Sciences
• Merck discloses new tax woes
• Movers
- Sara Lee, Kroger, Toll Brothers, Beazer Homes,
• Cooper Tire turns in a loss for Q3
US CDS Roundup (Previous Trading Day)
CDS Flow Summary - Sara Lee cooks up better CDS on bread gain
A ctive N ames - H isto rical Spreads
10
15
20
25
30
35
40
45
50
10-Oct
18-Oct
26-Oct
03-Nov
Act ive Names
Closing Mid
50
150
250
350
450
550
650
750
Kr oger Co/ T he - 34bp
Sar a Lee Cor p - 67bp
Gap Inc. - 105bp
Di l l ar d's Inc - 153bp
T enet Heal thcar e Cor p - 417bp
Gener al M otor s Cor p - 428bp
For d M otor Cor p - 528bp
Source: IGM, Bloomberg
Bakery product and cheesecake maker Sara Lee stirred up a notable tightening
in default today as market participants gave the firm a pat on the back for
successfully selling off its Hanesbrands for a one-time payment of USD2.4bln
and successfully adding products in the right places such as in breads and
breakfast. Net income rose to USD333mln, or 44 cents a share, from
USD67mln, or 9 cents a share. Sales rose 4.7% to USD2.89bln from
USD2.76bln. Sara Lee also raised its earnings forecast ending in June to 86
cents to 92 cents a share. Default tightened accordingly on a last bout of trade
at 68, which is in from 70/76 Monday. While Sara Lee's transformation
continues to be mulled, LBO candidate Avon Products again had default swap
trade. Levels went through at 20 today, which is in from 23/28. Recall that the
firm blew to 25 from 15 basis points last week on LBO rumors.
Food related concerns had noticeable tightening. Cargill traded at 16, which is
in from 20/25,