Default insurance spreads on Hungary's outstanding sovereign debt tightened further to fresh lows on Monday after dropping last week to levels not seen since Lehman Brothers, the US-based banking group collapsed into bankruptcy a year ago, London-based market analysts said.
The mid-spread of Hungary's five-year credit default swaps (CDS) was 194.21bps in Monday's trading, 3.15bps down from the previous session's close, CMA DataVision, a leading market data monitor told Econews in London.
Hungary's CDS spreads had dropped below 200bps last week for the first time this year and are now sharply down from the 630bps peak seen in March.
A CDS contract valued at 194.21bps means that the cost to insure every EUR 10,000,000 worth of bond exposure against default is EUR 194 210 a year for the benchmark five-year horizon, compared to EUR 630,000 charged at the end of the first quarter.
Hungary's CDS contracts were trading around 170bps before Lehman's collapse triggered widespread panic across global markets. (MTI-ECONEWS)