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Credit Market Commentary: Market Derived Signal: Spurned By T-Mobile, Sprint?s CDS Spread Expands Mar 11 Product Image

Credit Market Commentary: Market Derived Signal: Spurned By T-Mobile, Sprint?s CDS Spread Expands Mar 11

  • ID: 2084159
  • March 2011
  • Standard & Poors

Abstract
The news of AT&T's $39 billion bid for Deutsche Telekom AG's U.S. business dealt a blow to Sprint Nextel Corp., which recently considered merging with T-Mobile to reduce its subscriber losses. On March 9, we noted that the five-year credit default swap (CDS) spread for Sprint had tightened significantly on talk of a possible merger (see the Credit Market Commentary: "Market Derived Signal: The CDS Market Talks Up Potential Sprint-T-Mobile Merger" published March 9, 2011 on the Global Credit Portal). After AT&T's surprise proposal to acquire T-Mobile, the CDS spread on Sprint widened by 17.5% on Monday to 308 basis points (bps), according to CMA DataVision. On Tuesday, it widened another 7.4% to 331 bps. The merger between AT&T and...

Companies mentioned in this report are:
- Sprint Nextel Corp.

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.

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- Sprint Nextel Corp.

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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