Fitch Solutions: Renault SA CDS at Tightest Levels in Seven Years
After consistently pricing in 'BBB-' space for much of the past year, credit protection on Renault's debt is now pricing one notch higher, in line with 'BBB' levels.
The equity market has echoed the positive sentiment, driving the company's five year Probability of Default (PD) down 45% over the past month.
'Market sentiment for Renault has likely been buoyed by better-than-expected 2014 earnings amid lower labor costs and higher demand in Europe,' said Diana Allmendinger, Director.
Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.
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