CDS Protection on Campbell

In a previous post, we noticed that CDS protection on Campbell Soup is abnormally expensive relative to that of HNZ. It is not consistent with the yield on its debt either: the graph below shows that the yield on similar-maturity debt (in white) has tightened to 2.38% even though the CDS (in amber) kept widening out:



I did some casual research and found out that fundamentals on the company seem pretty good. Below, and except from recent Barclays research:

Campbell Soup Beats Consensus on F1Q and Raises FY Guidance. Despite relatively weak top-line performance partly due to difficult y/y comparisons, Campbell Soup beat consensus expectations for F1Q earnings and raised its full-year earnings and revenue guidance. Campbell 's debt balance stood at $2.905bn, up from $2.624bn last quarter and $2.756bn a year ago. However, the company contributed $260mn to its US pension plan during the quarter. LTM leverage now stands at 1.8x, up from 1.7x last quarter.