The cost of protecting debt issued by Yum Brands Inc. against a possible default has widened to its highest level since 2009, Fitch Solutions said Thursday. Five-year credit default swaps written on the debt of the operator of the Taco Bell and KFC restaurant chains, have widened by 20% in the past month, hurt by weaker-than-expected third-quarter earnings and concerns about the company's exposure to China. "There are also increased concerns among bondholders that YUM's financial strategy may become more aggressive, which may also weigh on CDS spreads," Fitch Director Diana Allmendinger said in a statement. The CDS Implied Rating had dropped steadily in the last year to BBB-minus from A, said Fitch.
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