Price of insuring Hungarian debt falls after eurozone debt deal

MNB

The cost of insuring Hungarian state debt fell on markets in London on Thursday, after European Union leaders agreed on a deal to manage the sovereign debt crisis in the eurozone.

CMA DataVision said that the benchmark 5-year mid-spread of Hungary's credit default swaps contracts (CDS) was around 482bp in trade in London late on Thursday, down from 526.5bp late Wednesday.

Hungary's CDS mid-spread was around 460bp at the beginning of September and around 255bp at the beginning of the summer.

A CDS contract valued at 482bp means that the cost to insure every €10m worth of bond exposure against default is €482,000 a year for the benchmark five-year horizon.

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

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