Fitch Solutions: Time Warner's CDS Underperform Ahead of Earnings

NEW YORK--(BUSINESS WIRE)-- Widening credit default swap (CDS) spreads are indicating shakier ground for Time Warner Cable Inc., according to Fitch Solutions in its latest earnings commentary.

CDS on Time Warner (reporting today) have widened 3% over the past quarter, underperforming the 10% tightening observed for the North America media sector. CDS for Time Warner have now established a wider trading pattern ('BBB-'). Time Warner's CDS liquidity also rose four rankings to trade in the 16th regional percentile. 'Wider spread levels amid higher CDS liquidity signal increased market uncertainty for Time Warner, potentially stemming from concerns over its future market share,' said Author and Director Diana Allmendinger.

Elsewhere, Sherwin-Williams Company (also reporting today) has seen CDS spreads rally 31% over the past three months, far outperforming the broader North America consumer goods sector (5% tighter). Credit risk protection for Sherwin Williams is now pricing tighter, at 'AA+' levels. 'Improved market sentiment for the coatings manufacturer may be due in part to stronger numbers coming from the housing market,' said Allmendinger.

Brunswick Corporation (CONSUMER GOODS/Leisure Goods)

Credit spreads have tightened over the last three months, with the five-year point tightening from 468 basis points (bps) to 317 bps, a decrease of -32%. The liquidity score on Brunswick Corporation decreased from 7.21 to 7.15 over the three-month period, causing an increase in liquidity from trading in the 22nd percentile to the 11th percentile.

Caterpillar Inc. (INDUSTRIALS/Industrial Engineering)

Credit spreads have tightened over the last three months, with the five-year point tightening from 130 bps to 108 bps, a decrease of -16%. The liquidity score on Caterpillar Inc. decreased from 6.6 to 6.48 over the three-month period, causing an increase in liquidity from trading in the fifth percentile to the second percentile.

Chubb Corporation (FINANCIALS/Nonlife Insurance)

Credit spreads have tightened over the last three months, with the five-year point tightening from 91 bps to 57 bps, a decrease of -37%. The liquidity score on Chubb Corporation decreased from 7.05 to 6.85 over the three-month period, causing an increase in liquidity from trading in the 16th percentile to the fifth percentile.

D R Horton Inc. (CONSUMER GOODS/Household Goods)

Credit spreads have tightened over the last three months, with the five-year point tightening from 357 bps to 212 bps, a decrease of -41%. The liquidity score on D R Horton Inc. increased from 6.72 to 7.33 over the three-month period, causing a decrease in liquidity from trading in the sixth percentile to the 17th percentile.

Dominion Resources Inc. (UTILITIES/Electricity)

Credit spreads have tightened over the last three months, with the five-year point tightening from 84 bps to 67 bps, a decrease of -21%. The liquidity score on Dominion Resources Inc. increased from 6.85 to 7.24 over the three-month period, causing a decrease in liquidity from trading in the 10th percentile to the 14th percentile.

Nucor Corporation (BASIC MATERIALS/Industrial Metals)

Credit spreads have tightened over the last three months, with the five-year point tightening from 145 bps to 115 bps, a decrease of -21%. The liquidity score on Nucor Corporation increased from 7.03 to 7.06 over the three-month period, causing an increase in liquidity from trading in the 15th percentile to the 10th percentile.

Newell Rubbermaid, Inc. (CONSUMER GOODS/Household Goods)

Credit spreads have tightened over the last three months, with the five-year point tightening from 163 bps to 116 bps, a decrease of -29%. The liquidity score on Newell Rubbermaid, Inc. increased from 6.86 to 7.21 over the three-month period, causing a decrease in liquidity from trading in the 10th percentile to the 13th percentile.

Raytheon Company (INDUSTRIALS/Aerospace & Defense)

Credit spreads have tightened over the last three months, with the five-year point tightening from 74 bps to 67 bps, a decrease of -9%. The liquidity score on Raytheon Company increased from 7.44 to 7.51 over the three-month period, causing an increase in liquidity from trading in the 29th percentile to the 23rd percentile.

AT&T Inc. (TELECOMMUNICATIONS/Fixed Line Telecommunications)

Credit spreads have widened over the last three months, with the five-year point widening from 76 bps to 84 bps, an increase of 10%. The liquidity score on AT&T Inc. increased from 7.44 to 7.67 over the three-month period, causing an increase in liquidity from trading in the 29th percentile to the 28th percentile.

Sherwin-Williams Company (The) (INDUSTRIALS/Construction & Materials)

Credit spreads have tightened over the last three months, with the five-year point tightening from 81 bps to 55 bps, a decrease of -31%. The liquidity score on Sherwin-Williams Company (The) increased from 7.15 to 7.25 over the three-month period, causing an increase in liquidity from trading in the 20th percentile to the 14th percentile.

Time Warner Cable Inc. (CONSUMER SERVICES/Media)

Credit spreads have widened over the last three months, with the five-year point widening from 175 bps to 180 bps, an increase of 3%. The liquidity score on Time Warner Cable Inc. increased from 7.14 to 7.3 over the three-month period, causing an increase in liquidity from trading in the 20th percentile to the 16th percentile.

Additional insightful market data and analysis is available at 'http://twitter.com/fitchsolutions'

Fitch Solutions, a division of the Fitch Group, focuses on the development of fixed-income products and services, bringing to market a wide range of data, analytical tools and related services. The division is also the distribution channel for Fitch Ratings content.

The Fitch Group also includes Fitch Ratings and is a majority-owned subsidiary of Fimalac, S.A. For additional information, please visit 'www.fitchsolutions.com'; 'www.fitchratings.com'; and 'www.fimalac.com'