(MTI) – Default insurance costs of Hungary’s sovereign debt fell close to pre-crisis levels on markets in London on Thursday, as outlooks for emerging market economies in the CEE region improved.
According to McGraw Hill-S+P Capital IQ’s CMA, a major CDS market data monitor in London, Hungary’s benchmark five-year credit default swaps (CDS) traded around 182 basis points on Thursday.
Hungary’s CDS contracts were around 170-180bp in the autumn of 2008, before the collapse of Lehman Brothers. The contracts were about 750bp at the height of the crisis early in 2009.
A CDS contract valued at 182bp means that the cost to insure every 10 million euros worth of sovereign FX bond exposure against default is around 182,000 euros a year for the benchmark five-year maturity.
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