OREANDA-NEWS. December 15, 2015. Recently announced acquisitions may be leading to some credit default swap (CDS) market volatility for Devon Energy Corporation, according to Fitch Solutions in its latest CDS case study snapshot.

Five-year CDS on Devon Energy widened out 42% over the past week and 158% since the start of the year and are now to pricing at their widest ever levels. After pricing consistently at 'BBB/BBB-' levels for much of the past year, credit protection on Devon's debt is now pricing in below investment grade territory in line with 'BB-' levels.

'The likely driver behind Devon's CDS widening of late is the recently announced Anadarko/STACK and Powder River Basin acquisitions, which appear to be making market participants nervous as they are not partial to deals that add debt,' said Director Diana Allmendinger.

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.