Wunderlich Securities Comments On Liberty Global's Blowout Of CDU

According to Wunderlich Securities, Liberty Global's (NASDAQ: LBTYA) blowout of CDU over the weekend highlights potency of total return swap.

Wunderlich Securities reported that German Chancellor Angela Merkel's Christian Democrats (CDU) lost power in Baden-Wuerttemberg this weekend for the first time since 1953 off concerns over nuclear policy, Libya and the Euro. “According to Der Spiegel, the Greens (24% of the vote) could well form a government with the Social Democrats. The CDU and FDP partners took only 44% of the tally. Political flux shows that it was wise not to ignore regulatory risk on Buy-rated Liberty Global's (LBTYA) purchase of KBW, with Liberty positioned through its Total Return Swap with JP Morgan (JP-NR) to still capture deal upside, as long as cable multiples hold and the market recognizes the superior growth vector of KBW.”

Liberty Global closed yesterday at $42.22.