CDS big movers

In the CDS market, Markit reported that Dutch bank SNS Bank enjoyed a spread contraction of 40 basis points in its five-year senior CDS to 157 bps, making it one of the best performers on Wednesday. The spread contraction resulted from the announcement of an equity raising to repay debt and the pricing of a €1.0 billion covered bond issue.

However, this didn't stop Moody's from placing its ratings on the bank on review for possible downgrade the next day. See below.

SNS Bank has A$925 million on issue in the Australian domestic bond market with maturities ranging from December this year to November 2011.

Like SNS Bank, SLM Corp also enjoyed a strong rally in its CDS spreads on Thursday, with a 115 bps contraction to 829 bps, making it the top performer on the day. Markit reported that the contraction came after SLM posted solid results and issued a bullish forecast. The student loan provider said it expects earnings per share to exceed $1.50 in 2010, well above the consensus forecast of $1.16.  

SLM Corp saw a further 54 bps contraction in its CDS on Friday to 775 bps, to make it the best performer for the week. SLM Corp has A$1.0 billion of bonds outstanding in the domestic market with maturities ranging from December 2010 to May 2012.

This time however, it was Standard & Poor's that wasn't so enthusiastic, issuing a note saying that the company's 'BBB-/A-3' credit ratings will remain on CreditWatch with negative implications. S&P is still concerned about the legislative risks SLM is exposed to and will only resolve the CreditWatch once these have been clarified.