NEW YORK--(BUSINESS WIRE)--Plans for the largest ever technology merger have sent credit default swap (CDS) for #Dell Inc. to all-time wide levels, according to Fitch Solutions in its latest CDS case study snapshot.
Five-year CDS on Dell have widened out 67% over the past month while CDS liquidity remains in the top global percentile rank. High CDS liquidity likely indicates high levels of market uncertainty over the future direction of spreads.
'Increased market scrutiny for Dell can likely be attributed to the planned #EMC acquisition, for which Dell will incur roughly $50 Billion of additional debt,' said Director Diana Allmendinger. 'Rumored asset sales and potential for proceeds to fall short of plan are also likely weighing on market sentiment as are potential tax liabilities for the EMC acquisition and weakening near-term growth.'
Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.
Fitch Group is a global leader in financial information services with operations in more than 30 countries. Fitch Group is comprised of: Fitch Ratings, a global leader in credit ratings and research; Fitch Solutions, a leading provider of credit market data, analytical tools and risk services; BMI Research, an independent provider of country risk and industry analysis specializing in emerging and frontier markets; and Fitch Learning, a preeminent training and professional development firm. With dual headquarters in London and New York, Fitch Group is majority owned by Hearst.
http://www.businesswire.com/news/home/20160107006175/en/Fitch-Planned-EMC-Merger-Sends-Dell-CDS
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