Fitch Solutions: Nokia's CDS 59% Tighter Post-Microsoft Buy

Thu Sep 12, 2013 10:36am EDT

(The following statement was released by the rating agency) NEW YORK, September 12 (Fitch) The credit default swap (CDS) market seems to be reacting favorably to Microsoft's plans to acquire Nokia Oyj, according to the latest case study from Fitch Solutions. Following the $7.2 billion acquisition on announcement on Sept.3, CDS spreads on Nokia have tightened 59%, while Microsoft remains largely illiquid. Additionally, the cost of credit protection on Nokia's debt is now at 'BB+' levels. That said, CDS liquidity for Nokia remains high. Trading in the third global percentile, 'Nokia is trading with more CDS liquidity than 97 percent of Fitch's CDS pricing universe, signaling still-high market uncertainty over future pricing,' said Director Diana Allmendinger. 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. Additional information about Fitch Solutions' products is available in the link below: 'here detail=130' Contact: Diana Allmendinger Director +1 212-908-0848 Fitch Solutions, 33 Whitehall Street, New York, NY 10004 Media Relations: Sandro Scenga, New York, Tel: +1 212-908-0278, Email: sandro.scenga@fitchratings.com. 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. Fitch Ratings and Fitch Solutions are part of the Fitch Group, a jointly-owned subsidiary of Fimalac, S.A. and Hearst Corporation. For additional information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com'; 'www.fimalac.com' and 'www.hearst.com'.

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