Credit Market Commentary: Market Derived Signal: Improvement In Computer Sciences' CDS Spread May Be Fleeting Feb 12
- Language: English
- Published: February 2012
The spread on Computer Sciences Corp.'s five-year credit default swap (CDS) widened to an all-time high for the week ended Nov. 14, as a variety of issues at the company converged to heighten the credit market's view of the company's risk of default. On Nov. 9, the company reported a fiscal second-quarter loss of $2.88 billion. In addition, the status of an important contract with the U.K. National Health Service (NHS) remains in limbo. Complicating matters is the fact that CEO Michael Laphen retired last month, creating uncertainty about company leadership until a successor is named. In addition, activist investors may pressure Computer Sciences to boost shareholder value. For example, Bill Ackman of Pershing Square Capital Management has reportedly reached...
Companies mentioned in this report are:
- Computer Sciences Corp.
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Research Type: Commentary
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