Bookmark this post with:
Friday, March 6, 2009
Chemtura CDS At Record 75 Pts Upfront
The market seems to have sealed the chemical company's fate, essentially saying the likelihood of bankruptcy is about 130% (give or take). Rumors are swirling that Chemtura's destitute bondholders have hired Akin Gump to help them salvage a little of what asset value the plastics maker might have left. With a full blown liquidity crisis and $375 million in notes due this July, the company at this point may at best have another 4 more months of life.
Sphere: Related Content
Print this post
Subscribe to:
Post Comments (Atom)
4 comments:
how do you get the 130% number?
$7.5m up front + $500k p.a. has a PV of about $9.39m (disc at 10%) -- giving you a 93.9% probability of default
do you divide this by a LGD or something?
(sorry if this is obtuse, it's not not my area)
it was a joke
Have you heard a date they are most likely to file? Time Frame?
All the chemicals are getting raked...except OLN...CDS still around 200...guess hedging your chlorine/caustic soda revenue stream with Winchester ammunition isn't so weird after all....
Post a Comment