Repsol CDS Surge Continues
By now everyone is aware of Argentina's disturbing plan to nationalize YPF over the protests of Spain, and soon EU. And as we noted yesterday, the equity value of YPF is essentially a doughnut as BofA stated, if somewhat more correct politically. YPF continues to be halted on the NYSE as per a T2 halt (aka "The news has begun the dissemination process through a Regulation FD compliant method(s).") and there is little availability for price discovery at the first derivative level. However, where discovery is ample is at the second degree, namely Spanish Repsol-YPF which is a majority owner of YPF, whose CDS continue soaring, and hit a whopping 391 earlier today, well over 100 bps compared to the Friday closing spread. For a massive energy production company this is a big move and we can only hope its Spanish bank shareholders are well insulated from mark to market losses, although somehow we doubt it.