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American General spreads gap out on Fortress acquisition
Thursday, August 12, 2010
Spreads on American General gapped out and steepened on the news that AIG will sell 80% of its consumer lending subsidiary to hedge fund Fortress. The 6.9% 2017 bonds, the company’s most liquid, fell from around 90 cents in the dollar to 83 yesterday.
According to CMA, the company’s five-year credit default swaps widened from 1.8/2.8% up front to 6.5/8.2%, equivalent to a rise of more than 100 basis points in spread terms.
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CFlux secondary
CLO index levels:
| Index | 6 Feb |
|
| CFlux USD AAA | ↑ | 94.9 |
| CFlux USD AA | ↓ | 81.3 |
| CFlux USD A | ↓ | 75.0 |
| CFlux USD BBB | ↑ | 74.8 |
| CFlux USD BB | ↑ |
72.1 |
| CFlux USD EQ | ↑ | 67.6 |
