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A gauge of U.S. corporate credit risk was little changed as a rise in jobless claims was offset by an increase in Chinese exports.
The Markit CDX North American Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses or to speculate on creditworthiness, fell 0.4 basis point to a mid-price of 86.3 basis points at 4:37 p.m. in New York, according to prices compiled by Bloomberg.
Earlier, the index dropped as much as 1.4 basis points as Chinese overseas shipments surged 14.1 percent in December from a year earlier, customs administration data showed today. That’s the biggest gain since May and beat a 5 percent median forecast in a Bloomberg News survey. Signs that global growth is accelerating may ease concern that an economic slowdown will hinder companies’ ability to repay debt.
“The Chinese data was good, better than people expected,” Scott MacDonald, head of research at MC Asset Management Holdings LLC in Stamford, Connecticut, said in a telephone interview. “Long term, it’s good for the U.S. economy considering it’s one of our major trade partners. It’s a tiny step for China in terms of getting away from a hard landing.”
Jobless claims in the U.S. climbed 4,000 to 371,000 in the week ended Jan. 5, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg called for a drop to 365,000.
Hiring data will reflect the political uncertainty while lawmakers negotiate the nation’s debt ceiling, according to MacDonald. “The U.S. economy has a degree of resilience, but you have a lot of political risk sitting on the table. Companies are still cautious as to how they are approaching 2013,” he said.
The credit-swaps index typically falls as investor confidence improves and rises as it deteriorates. The contracts pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.
DirecTV (DTV), the largest U.S. satellite-TV operator, issued $750 million of 1.75 percent, five-year securities to yield 115 basis points more than similar-maturity Treasuries, data compiled by Bloomberg show. Proceeds from the sale may be used to buy back stock, the El Segundo, California-based company said today in a regulatory filing.
The risk premium on the Markit CDX North American High Yield Index fell 8.8 basis points to 436.5 basis points, according to prices compiled by Bloomberg.
Credit swaps protecting against losses on the debt (SVU) of Albertson’s Inc. dropped 5.1 percentage points to 20 percent upfront as of 3:30 p.m. in New York, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
A Cerberus Capital Management LP-led investor group agreed to acquire Supervalu Inc. (SVU)’s Albertson’s, Acme, Jewel-Osco, Shaw’s and Star Market grocery stores in a transaction valued at about $3.3 billion. Cerberus, which specializes in distressed investing, bought a stake in Albertson’s in 2006 with a group that included Supervalu.
Credit swaps tied to Supervalu declined 55.2 basis points to 764.7 basis points, according to CMA.
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