ID :
203380
Thu, 08/25/2011 - 06:47
Auther :
Shortlink :
https://oananews.org//node/203380
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S. Korea's CDS premium hits 15-month high
SEOUL, Aug. 25 (Yonhap) -- South Korea's credit default swap (CDS) premium, which reflects the cost of hedging credit risks on sovereign debt, soared to a 15-month high amid mounting jitters about European and U.S. financial institutions, data showed Thursday.
The CDS premium on South Korea's five-year foreign currency bonds reached 149 basis points on Wednesday, up 9 basis points from the previous session, according to industry data. A higher reading indicates a deterioration in the credit of South Korean government bonds.
The figure marks the highest level since the 153 basis points registered on May 26, 2010. A basis point is 0.01 percentage point.
South Korea's CDS premium has been trending higher following the first-ever rating cut on U.S. debt earlier this month. After ending at 101 basis points on Aug. 1, the rate soared to 121 basis points following Standard & Poor's downgrade on Aug. 5.
"Countries across Asia have been seeing a rise in their CDS premiums, due to persistent worries about the European bank sector as well as U.S. financial firms such as Bank of America," an industry official said.
The spread on foreign exchange stabilization bonds, which mature in 2019, hit 127 basis points, nearing the 129 basis points reached on Nov. 30 in the aftermath of North Korea's shelling of Yeonpyeong Island.
mil@yna.co.kr
(END)
The CDS premium on South Korea's five-year foreign currency bonds reached 149 basis points on Wednesday, up 9 basis points from the previous session, according to industry data. A higher reading indicates a deterioration in the credit of South Korean government bonds.
The figure marks the highest level since the 153 basis points registered on May 26, 2010. A basis point is 0.01 percentage point.
South Korea's CDS premium has been trending higher following the first-ever rating cut on U.S. debt earlier this month. After ending at 101 basis points on Aug. 1, the rate soared to 121 basis points following Standard & Poor's downgrade on Aug. 5.
"Countries across Asia have been seeing a rise in their CDS premiums, due to persistent worries about the European bank sector as well as U.S. financial firms such as Bank of America," an industry official said.
The spread on foreign exchange stabilization bonds, which mature in 2019, hit 127 basis points, nearing the 129 basis points reached on Nov. 30 in the aftermath of North Korea's shelling of Yeonpyeong Island.
mil@yna.co.kr
(END)
