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Hungary default insurance costs falls to year-low after start of IMF negotiations

The cost of insuring Hungary's sovereign debt against default fell to a low for the year on markets in London on Wednesday after official negotiations on precautionary financial assistance from the International Monetary Fund and the European Union started in Budapest on Tuesday.
According to CMA Datavision, the biggest CDS market data monitor in London, Hungary's five-year credit default swaps (CDS) fell to 479-480bp on Wednesday, after dropping to about 494bp a day earlier. A CDS contract valued at 480bp means that the cost to insure every €10 million worth of bond exposure against default is €480,000 a year for the benchmark five-year horizon. Hungary's CDS spreads were over 750bp in the first week of this year.