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UPDATE - Hungary default insurance cost hits record high

Default insurance costs on Hungary's sovereign debt reached record highs on markets in London on Wednesday, the latest was around 710bps in the evening hours.

Earlier, the day started in record breaking mood, and the first new historic high was 682bp early Wednesday, rising from 650bp at the previous close, according to CMA DataVision, a major CDS market data monitor in London.

Five-year credit default swaps (CDS) contracts trading around 710bps mean that the cost to insure every EUR 10m worth of bond exposure against default is roundabout EUR 710,000 a year for the benchmark five-year horizon.

Hungary is seeking financial assistance from the IMF and EU as a precautionary measure, intended to help the country to continue to get financing on the market. But the country's recently approved Central Bank Act appears to be a point of contention with its negotiating partners.

City analysts said on Tuesday that Hungary would probably have to amend the act if the IMF and EU are to continue talks on the financial assistance.