Euro zone CDS widen as concern deepens over debt - Reuters

LONDON | Tue Nov 30, 2010 4:27am EST

LONDON Nov 30 (Reuters) - The cost of insuring most euro zone government debt against default rose on Tuesday after the EU and IMF's 85-billion euro bailout of Ireland failed to dispel fears that the rest of the region was out of financial danger.

As the yield spreads of euro zone peripheral nations rose over those of benchmark Germany, 5-year credit default swaps on Italian debt widened by 13 basis points to 625 basis points, meaning it now costs 625,000 euros to insure 10 million euros' worth of Italian bonds against sovereign default.

Five-year CDS on Spain and Portugal both widened by 22 basis points to 373 and 560 basis points, respectively.

Five-year CDS for Ireland and Greece, the two euro zone members to have received emergency funding this year, rose, with Irish CDS 13 basis points wider at 625 basis points and Greek CDS up 18 basis points at 970.

Belgian CDS rose 13 basis points to 195 basis points, as the difference between Belgian 10-year bond yields BE10YT=TWEB and German Bunds DE10YT=TWEB hit its highest since the launch of the euro.

French 5-year CDS rose 6 basis points to 105 basis points, reflecting investor concern over the cost to the region's core members of bailing out weaker euro zone economies.

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