The cost of insuring Hungary’s sovereign debt against default fell in markets in London on Wednesday as the forint strengthened. According to CMA, a market monitor that is part of S&P Capital IQ, Hungary’s five-year credit default swaps (CDS) fell to around 367bp on Wednesday from 388.4bp at the previous close. Hungary’s CDS spreads were over 395bp at the beginning of the week. A CDS contract valued at 367bp means that the cost to insure every €10 million worth of bond exposure against default is €367,000 a year for the benchmark five-year horizon. The forint firmed close to 300 to the euro on Wednesday. The currency weakened past the threshold early in March.
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