…But fear itself. Contrast this:
RTRS-FITCH RATINGS SAYS BP’S CDS MOVE OVER DONE
BP 1-YEAR DEFAULT SWAPS RISE 432.5 BASIS POINTS TO 1,075
While bearing in mind this — five-year CDS on BP widened to 600 bps (+115) earlier on Wednesday, according to Markit:
And that brings us closer to upfront payments on BP CDS.
Traders might ask for this at between 600 and 700 bps on the five-year spread, Markit’s Gavan Nolan says — although this would vary from contract to contract.
(CDS spreads for the other Deepwater corporate casualties Anadarko and Transocean are already past trading upfront, in comparison.)
And yet both companies’ stocks are now markedly outperforming BP:
(H/T the FT’s Carola Hoyos)
And as the WSJ’s Heard on the Street has pointed out: if you’re an Obama aide pressuring BP to fund the Gulf’s recovery, while at the same time trying to keep markets from tanking the energy giant altogether — well, you’re starting to lose control of this balancing act.