Are Sparks Flying At NRUC?

The major outlier in IG CDS over the past two days has been a name that Zero Hedge frequent readers are all too familiar with. The 5 year CDS of National Rural Utilities Cooperative Finance Corp has been on a 100 bps widening trajectory with no available news. Several traders have voiced their concern over the contents of the upcoming earnings call, which the company has postponed from its original date this week, to some time next week.

Whether or not that is the case, we will know in a few days. In the meantime, the market is voicing its agreement with ZH's assumption that not all may be as great as presented by the company, despite the company's successful recent attempt to obtain a reduced credit facility. Curiously, the widening is occurring despite the company's public refutation of the claims we had voiced in early March. Even more curiously, the press release that NRUC used to refute Zero Hedge's claims has been taken down. Luckily, our colleagues at Clusterstock took a snapshot of it and the jist of NRUC's release can be found here.

Indicatively, NRUC CDS was last trading around 350 bps, 50 wider from its closing level yesterday.

Disclosure: no position in any NRUC securities.