Portuguese, Spanish Credit Default Swaps Hit Record High

[Joanne98]

Source: Reuters

Nov 29 (Reuters) - The cost of insuring Portuguese and Spanish debt against default rose to a record high on Monday after a tepid Italian auction result and on fears over the spread of the euro zone debt crisis.

Italy sold 5.5 billion euros of government bonds on Monday, which analysts said drew tepid demand after an EU/IMF bailout for Ireland failed to stem concerns about the fiscal problems plaguing peripheral issuers.

"Spain and Portugal are now at record wides, suggesting that contagion fears haven't been assuaged by Ireland's bailout," said Markit analyst Gavan Nolan. Five-year credit default swaps (CDS) on Spanish government debt rose to 350 bps, according to data monitor Markit. This means it costs 350,000 euros to protect 10 million euros of exposure to Spanish bonds. Portuguese CDS also hit a record at 545 bps


Read more: http://www.reuters.com/article/idUSLDE6AS11420101129

[xchrom]

1. interesting. nt

[angstlessk]

2. why in h*ll do the bonds need to be insured, aren't they all paid back

at 100% which is why everyone except bond holders are made to sacrifice?

[PSPS]

3. Credit Default Swaps are a derivative product and should be banned.