OREANDA-NEWS. Five-year Credit Default Swaps (CDS) on European automobiles & parts companies have undergone notable tightening recently, according to Fitch Solutions in its latest case study.

On average, CDS on European automobiles & parts companies have tightened 16% over the past week, with Renault leading the sector, with their spreads firming 25% last week, followed by Fiat Chrysler and Peugeot, both 19% tighter over the same period.

"Market concerns related to Volkswagen's emission tests scandal had driven CDS spreads on the overall sector wider in late September. It appears the market has since regained confidence in European autos, causing spreads to revert back," said Diana Allmendinger, Director, Fitch Solutions.

Volkswagen CDS, while also undergoing recent tightening, remain elevated, well wide of levels observed prior to the emissions tests scandal.

Fitch Solutions case studies build on data from its CDS Pricing Service and proprietary quantitative models, including CDS Implied Ratings. These credit risk indicators are designed to provide real-time, market-based views of creditworthiness. As such, they can and often do reflect more short term market views on factors such as currencies, seasonal market effects and short-term technical influences. This is in contrast to Fitch Ratings' Issuer Default Ratings (IDRs), which are based on forward-looking fundamental credit analysis over an extended period of time.