The cost of insuring Hungary's sovereign debt against default fell under 300bp on markets in London.
The cost of insuring Hungary's sovereign debt against default fell under 300bp on markets in London on Friday, reaching a new low for the year as optimism was boosted by the government's fiscal adjustment programme unveiled a week earlier and market expectations for an agreement with the IMF/EU. According to Markit, a big CDS market data monitor in London, Hungary's five-year credit default swaps (CDS) fell 23bp to around 298bp on Friday, down 70bp from a week earlier and 85bp from a month earlier. A CDS contract valued at 298bp means that the cost to insure every EUR 10m worth of bond exposure against default is €298,000 a year for the benchmark five-year horizon. Hungary's CDS spreads were over 750bp in the first week of this year.