--Gavan Nolan, credit analyst at Markit
Last week there seemed to be a consensus among the commentariat that BP PLC’s five-year spreads were overshooting significantly. A level of 500bp was outlandish for a AA credit.
Since then, the oil company has been downgraded six notches to BBB by Fitch and the five-year spreads exceeded 600bp on June 16. Its curve inverted steeply, with the one-year spreads being quoted at 1,000bp – albeit in very thin liquidity.
How did ....