It is relevant to note that the spreads on credit-default swap (CDS) indexes for Australian bonds have been falling over the past few days (source:Bloomberg).
A decrease in the cost of protecting Australia's corporate bonds from default indicates improving investor perceptions of credit quality.
CDS indexes are benchmarks for protecting bonds against default and traders use them to speculate on changes in credit quality. A basis point, or 0.01 percentage point, is worth $1,000 on a swap that protects $10 million of debt from default.
I would speculate that if this trend continues, there will be an increase in the willingness of,and pressure on, the Banks to re-finance Centro.
Just my opinion. Trying to read between the lines.
CNP Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
