NEW YORK, Nov 01, 2010 (BUSINESS WIRE) -- While the announced succession plan for Berkshire Hathaway CEO Warren Buffett did not rattle the credit markets, the company's longer term prospects remain more of a question mark for CDS market participants, according to Fitch Solutions in its latest earnings commentary.
CDS spreads on Berkshire Hathaway (reporting Friday) have rallied 34% in recent weeks, while CDS liquidity dropped. 'Warren Buffett's succession news barely registered as a blip on the radar of the credit markets,' said Author and Managing Director Jonathan Di Giambattista. Nonetheless, 'CDS on Berkshire is still pricing five notches lower than Fitch's IDR, showing continued unrest from CDS market participants on the company's longer term health.'
Elsewhere, CDS on Pfizer Inc. (reporting tomorrow) have widened by 12%, though spreads are still in line with historical 'AA' trading levels. Also in Pfizer's favor is its CDS liquidity, which has dropped five rankings. Meanwhile, despite 12% CDS tightening and declining CDS liquidity, credit market uncertainty for Aetna Corporation (reporting Wednesday) exceeds that of Pfizer. 'Aetna's liquidity is at a higher percentile than Pfizer, which is showing greater uncertainty over Aetna's credit condition,' said Author and managing Director Jonathan Di Giambattista.
Ambac Financial Group, Inc. (FINANCIALS/Nonlife Insurance)
Credit spreads have widened over the last three months, with the five-year point widening from 6121 basis points (bps) to 9635 bps, an increase of 57%. The liquidity score on Ambac Financial Group, Inc. increased from 6.9 to 7.51 over the three-month period, causing a decrease in liquidity from trading in the fourth percentile to the 13th percentile.
Aetna Inc. (HEALTH CARE/Health Care Equipment & Services)
Credit spreads have tightened over the last three months, with the five-year point tightening from 74 bps to 65 bps, a decrease of -13%. The liquidity score on Aetna Inc. increased from 7.35 to 7.66 over the three-month period, causing a decrease in liquidity from trading in the 13th percentile to the 18th percentile.
Allergan, Inc. (HEALTH CARE/Pharmaceuticals & Biotechnology)
Credit spreads have tightened over the last three months, with the five-year point tightening from 49 bps to 45 bps, a decrease of -8%. The liquidity score on Allergan, Inc. increased from 8.62 to 8.67 over the three-month period, causing an increase in liquidity from trading in the 48th percentile to the 46th percentile.
American International Group Inc. (FINANCIALS/Nonlife Insurance)
Credit spreads have tightened over the last three months, with the five-year point tightening from 316 bps to 204 bps, a decrease of -35%. The liquidity score on American International Group Inc. increased from 6.88 to 7.13 over the three-month period, causing a decrease in liquidity from trading in the fourth percentile to the sixth percentile.
Becton, Dickinson and Company (HEALTH CARE/Health Care Equipment & Services)
Credit spreads have tightened over the last three months, with the five-year point tightening from 79 bps to 75 bps, a decrease of -6%. The liquidity score on Becton, Dickinson and Company decreased from 10.47 to 9.89 over the three-month period, causing an increase in liquidity from trading in the 77th percentile to the 70th percentile.
BP plc (OIL & GAS/Oil & Gas Producers)
Credit spreads have tightened over the last three months, with the five-year point tightening from 325 bps to 149 bps, a decrease of -54%. The liquidity score on BP plc increased from 7.36 to 7.52 over the three-month period, causing a decrease in liquidity from trading in the 12th percentile to the 16th percentile.
Berkshire Hathaway Inc. (FINANCIALS/Nonlife Insurance)
Credit spreads have tightened over the last three months, with the five-year point tightening from 187 bps to 123 bps, a decrease of -34%. The liquidity score on Berkshire Hathaway Inc. increased from 7.12 to 7.54 over the three-month period, causing a decrease in liquidity from trading in the eighth percentile to the 14th percentile.
Kraft Food Inc. (CONSUMER GOODS/Food Producers)
Credit spreads have tightened over the last three months, with the five-year point tightening from 62 bps to 53 bps, a decrease of -14%. The liquidity score on Kraft Food Inc. increased from 7.66 to 8.07 over the three-month period, causing a decrease in liquidity from trading in the 23rd percentile to the 31st percentile.
Lincoln National Corporation (FINANCIALS/Life Insurance)
Credit spreads have tightened over the last three months, with the five-year point tightening from 276 bps to 206 bps, a decrease of -25%. The liquidity score on Lincoln National Corporation decreased from 7.43 to 7.31 over the three-month period, causing an increase in liquidity from trading in the 16th percentile to the ninth percentile.
Pitney Bowes Inc. (TECHNOLOGY/Technology Hardware & Equipment)
Credit spreads have widened over the last three months, with the five-year point widening from 119 bps to 165 bps, an increase of 39%. The liquidity score on Pitney Bowes Inc. decreased from 7.87 to 7.74 over the three-month period, causing an increase in liquidity from trading in the 29th percentile to the 21st percentile.
Pfizer Inc. (HEALTH CARE/Pharmaceuticals & Biotechnology)
Credit spreads have widened over the last three months, with the five-year point widening from 49 bps to 55 bps, an increase of 12%. The liquidity score on Pfizer Inc. increased from 7.83 to 8.13 over the three-month period, causing a decrease in liquidity from trading in the 28th percentile to the 33rd percentile.
Prudential Financial Inc. (FINANCIALS/Life Insurance)
Credit spreads have tightened over the last three months, with the five-year point tightening from 238 bps to 201 bps, a decrease of -15%. The liquidity score on Prudential Financial Inc. increased from 7.21 to 7.34 over the three-month period, causing an increase in liquidity from trading in the 10th percentile to the ninth percentile.
WellPoint Inc (HEALTH CARE/Health Care Equipment & Services)
Credit spreads have tightened over the last three months, with the five-year point tightening from 98 bps to 90 bps, a decrease of -8%. The liquidity score on WellPoint Inc increased from 7.42 to 8.11 over the three-month period, causing a decrease in liquidity from trading in the 16th percentile to the 33rd percentile.
Humana Inc. (HEALTH CARE/Health Care Equipment & Services)
Credit spreads have tightened over the last three months, with the five-year point tightening from 156 bps to 136 bps, a decrease of -13%. The liquidity score on Humana Inc. increased from 7.72 to 7.86 over the three-month period. The regional percentile ranking stayed the same
Radian Group Inc. (FINANCIALS/Nonlife Insurance)
Credit spreads have tightened over the last three months, with the five-year point tightening from 618 bps to 507 bps, a decrease of -18%. The liquidity score on Radian Group Inc. decreased from 6.49 to 6.43 over the three-month period. The regional percentile ranking stayed the same
Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content.
The Fitch Group also includes Fitch Ratings and Algorithmics, and is a majority-owned subsidiary of Fimalac, S.A. For additional information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com'; 'www.algorithmics.com'; and 'www.fimalac.com'.
SOURCE: Fitch Solutions
Share Investor Blog - Stockmarket & Business commentary
Discuss this topic @ Share Investor Forum - Register free
Download the 2009 Warren Buffett Letter & 2009 Annual Report to Berkshire Hathaway Shareholders
Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
Recommended Amazon Reading
 | The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham Buy new: $14.95 / Used from: $10.10 Usually ships in 24 hours |
 | The Snowball: Warren Buffett and the Business of Life by Alice Schroeder Buy new: $11.00 / Used from: $6.00 Usually ships in 24 hours |
No comments:
Post a Comment