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Abstract
Reaction from the credit markets to upheaval in the Arabic region was relatively muted last month, with traders reporting an uptick in volatility but no broad-based selling. Credit derivative indexes moved some 5% to 7.5% wider between February 21 and February 24, as oil prices spiked, but cash indexes were little changed. Energy companies with high exposure to the region, however, including Italy's ENI as well as chemicals credits, did come under some pressure. Among North American credits, energy companies Occidental Petroleum and Anardarko Petroleum moved more than 10% higher for five-year credit protection, on February 22 and 23, respectively. US and European high yield markets hit all-time low yields earlier last month. bonds), High yield's pick-up over government bonds remains compelling, according to Hans Peterson, chief investment officer, private banking and global head of investment strategy at SEB Investments in Stockholm. High yield curve trades have also been attracting interest from some accounts, particularly hedge funds.