Default insurance costs on Hungary’s sovereign debt retreated on Friday after reaching record highs in the previous days.
According to CMA DataVision, a major CDS market data monitor in London, Hungary’s five-year credit default swaps (CDS) traded a little over 690bp early Friday, falling from 735bp after the market’s close on Thursday.
A CDS contract valued at 690bp means that the cost to insure every €10m worth of bond exposure against default is €690,000 a year for the benchmark five-year horizon.
City analysts said market concerns about a possible Hungarian default were “exaggerated”.
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