(The following statement was released by the rating agency)
NEW YORK, January 28 (Fitch) CDS market sentiment towards French
company Alstom has worsened in the last week after the company
cut its profit
forecast due to lacklustre demand for power equipment, according
to the latest
case study from Fitch Solutions.
â€œCredit default swaps on Alstom widened out 35% last week,
underperforming our European Industrials CDS Index, which moved
6% wider,â€� said
Diana Allmendinger, Director, Fitch Solutions.
CDS market sentiment for Alstom may have been further impacted
by recent news
reports of an investigation into its Brazilian operations,
alleging that Alstom
paid bribes to gain public contracts in the late 1990â€™s and
After pricing consistently in line with â€˜BBBâ€™ spread levels,
Alstomâ€™s debt are now testing below investment grade levels.
CDS liquidity for Alstom increased slightly last week, moving up
to trade in the 23rd global percentile. Increased CDS liquidity
signals increased market uncertainty over future CDS pricing for
Meanwhile, Fitch Solutionsâ€™ five-year probability of default
for Alstom grew
112% last week from 5.05% to 10.7% as equity markets echoed the
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