The FINANCIAL -- New
York-21 June 2011: Further evidence of the stumbling U.S. housing
market is evident in Lennar Corporation's still-widening credit default
swap (CDS) spreads and rising liquidity, according to Fitch Solutions in
its latest earnings commentary.
CDS on Lennar (reporting 2Q'11 earnings Thursday) have widened 24% over the past three months, underperforming the 7% widening observed for the broader North America consumer goods industry. Credit protection on Lennar remains in 'B+' territory with CDS liquidity rising to the fourth regional percentile from the seventh. 'Concerns over the ailing housing market continue to weigh on market sentiment for Lennar,' said Author and Director Diana Allmendinger.
Elsewhere, FedEx Corporation (reporting on Wednesday) appears to be on more solid footing as its CDS widened only 1.7%. Additionally, CDS liquidity for FedEx fell seven rankings to trade in the 13th regional percentile from the sixth. 'The credit markets are clearly showing increased confidence for FedEx,' said Allmendinger.
Carnival Corporation (CONSUMER SERVICES/Travel & Leisure)
Credit spreads have widened over the last three months, with the five-year point widening from 101 basis points (bps) to 109 bps, an increase of 7%. The liquidity score on Carnival Corporation decreased from 7.59 to 7.24 over the three-month period, causing an increase in liquidity from trading in the 20th percentile to the 14th percentile.
Darden Restaurants, Inc. (CONSUMER SERVICES/Travel & Leisure)
Credit spreads have widened over the last three months, with the five-year point widening from 118 bps to 124 bps, an increase of 4%. The liquidity score on Darden Restaurants, Inc. decreased from 7.86 to 7.64 over the three-month period, causing an increase in liquidity from trading in the 32nd percentile to the 28th percentile.
Fedex Corporation (INDUSTRIALS/Industrial Transportation)
Credit spreads have widened over the last three months, with the five-year point widening from 93 bps to 94 bps, an increase of 2%. The liquidity score on Fedex Corporation increased from 7.05 to 7.22 over the three-month period, causing a decrease in liquidity from trading in the sixth percentile to the 13th percentile.
H&R Block Inc. (CONSUMER SERVICES/General Retailers)
Credit spreads have widened over the last three months, with the five-year point widening from 366 bps to 439 bps, an increase of 20%. The liquidity score on H&R Block Inc. decreased from 8.69 to 8.26 over the three-month period, causing an increase in liquidity from trading in the 51st percentile to the 46th percentile.
Lennar Corporation (CONSUMER GOODS/Household Goods)
Credit spreads have widened over the last three months, with the five-year point widening from 339 bps to 422 bps, an increase of 24%. The liquidity score on Lennar Corporation decreased from 7.12 to 6.78 over the three-month period, causing an increase in liquidity from trading in the seventh percentile to the fourth percentile.
Oracle Corporation (TECHNOLOGY/Software & Computer Services)
Credit spreads have widened over the last three months, with the five-year point widening from 34 bps to 39 bps, an increase of 14%. The liquidity score on Oracle Corporation decreased from 8.7 to 8.05 over the three-month period, causing an increase in liquidity from trading in the 52nd percentile to the 39th percentile.
Rite Aid Corporation (CONSUMER SERVICES/Food & Drug Retailers)
Credit spreads have widened over the last three months, with the five-year point widening from 927 bps to 1013 bps, an increase of 9%. The liquidity score on Rite Aid Corporation increased from 7.17 to 7.21 over the three-month period, causing a decrease in liquidity from trading in the eighth percentile to the 13th percentile.
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