Speculation that Wesfarmers
(ASX:WES) might bid for the assets of the failed miner Griffin Coal sparked a negative reaction in the credit market yesterday.
Credit-default swaps on Wesfarmers climbed 3 basis points to 87.5 basis points, according to Deutsche Bank, in a sign that investors might be less confident about the company’s ability to pay its debts. The swaps are used to insure against a company defaulting on loans.
Griffin is Western Australia’s oldest coal miner and appointed an administrator on January 3 after it couldn’t pay interest on $475 million of bonds.
Wesfarmers reported a net profit after tax of $1.5 billion in 2009.
