BP Finalizing 5-10 Year, $5 Billion Unsecured Bond Offering, 8-10% Yield

Just reported on CNBC. The yield on the issue is massive and is certainly a means to encourage basis traders to cover their naked CDS positions at a profit. Look for 5 year CDS to widen to the neighborhood of the new issue spread. BP better hope this is all the liquidity it will need, as the next bond offering will have to come at  10-15%, the third even wider, etc. By then, of course, there would be no equity value left.


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