MARKET TALK: Short-Term BP Bonds Cheap But Beware Volatility

11th Jun 2010 16:24

1524 GMT [Dow Jones] BP's (BP) short-term bonds currently look very compelling, says BNP Paribas analyst Richard Birrer, adding that the dollar-denominated 5.25% due 2013 and 3.625% due 2014 yielding 6.5% and 6.1% respectively, compared with pre-spill yields of 2.2% and 2.5%. Says that, in the near term bankruptcy risk is extremely low, but also cautions that investors will likely face substantial volatility and headline risk in the coming weeks. "Our core view is that the implied bankruptcy risk for BP demonstrated by the inverted CDS curve is not justified, primarily due to the company's robust balance sheet and liquidity position, which we believe are sufficient to manage clean-up costs and future damage liabilities," he says. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires June 11, 2010 11:24 ET (15:24 GMT)