Credit Market Commentary: Market Derived Signal: RadioShack?s Share Repurchase Program Gets Good Reception With Tighter CDS Spreads

Standard & Poors, August 2010

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.

Abstract
Since our July 28 commentary, RadioShack's CDS spread tightened 60 bps as market caution eased regarding the prospects of the company being acquired in a leveraged buy-out. With the tightening trend, RadioShack's CDS moved significantly tighter than its 'BB' consumer discretionary CDS benchmark (see chart 1). In comparison with its 'BB' consumer discretionary CDS benchmark, RadioShack's CDS has rebounded from its widest gap. Its widest gap was 91 bps, when RadioShack's CDS spread was 388 bps and the benchmark CDS spread was 297 bps. The tightest gap occurred on July 27, 2009, when RadioShack's CDS spread of 131 bps was 183 bps tighter than the benchmark CDS spread of 314 bps. The current CDS spread of 250 bps is 51...

Companies mentioned in this report are: RadioShack Corp.

RadioShack Corp.

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