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Cost of insuring Hungarian debt reaches two-and-a-half-year high

MNB

The cost of insuring Hungarian state debt rose to a two-and-a-half year high on markets in London on Tuesday, climbing with the cost of insuring the state debt of eurozone members.

CMA DataVision said that the benchmark 5-year mid-spread of Hungary’s credit default swaps contracts (CDS) was around 612bp in trade in London on Tuesday, up from about 602bp at the previous close.

A CDS contract valued at 612bp means that the cost to insure every €10m worth of bond exposure against default is €612,000 a year for the benchmark five-year horizon.

Hungary’s CDS mid-spread peaked at 630bp in March 2009.

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