ID :
213113
Fri, 10/28/2011 - 03:40
Auther :
Shortlink :
https://oananews.org//node/213113
The shortlink copeid
S. Korea's CDS premium dips on Europe debt plan
SEOUL (Yonhap) - The cost of insuring South Korea's sovereign debt against default trended lower after European leaders made a breakthrough in a plan designed to resolve the region's spiraling debt problems, data showed Friday.
The credit default swap (CDS) premium on South Korea's foreign currency bonds stood at 136 basis points as of 4:30 p.m. on the Asian market on Thursday, down 14 basis points from a day earlier, according to the data by the Korea Center of International Finance.
The spread on CDS reflects the cost of hedging credit risks on corporate or sovereign debt. A steep rise indicates a deterioration in the credit of South Korean government bonds and higher costs for bond issuances. A basis point is 0.01 percentage point.
South Korea's CDS premium had been trending higher amid persisting global uncertainties. Earlier this week, the figure had hovered around the 150-basis point level.
The fall in CDS premium comes after European leaders agreed on a set of measures that include a write-down of 50 percent of banks' Greek bond holdings, a rescue fund expansion and bank recapitalization. Growing views that China will eventually move to help the region also added on to the renewed optimism.
The cost of insuring South Korean government bonds against default, however, still remains 19 basis points higher compared with that ahead of the Aug. 5 U.S. credit rating downgrade, the data showed.
The credit default swap (CDS) premium on South Korea's foreign currency bonds stood at 136 basis points as of 4:30 p.m. on the Asian market on Thursday, down 14 basis points from a day earlier, according to the data by the Korea Center of International Finance.
The spread on CDS reflects the cost of hedging credit risks on corporate or sovereign debt. A steep rise indicates a deterioration in the credit of South Korean government bonds and higher costs for bond issuances. A basis point is 0.01 percentage point.
South Korea's CDS premium had been trending higher amid persisting global uncertainties. Earlier this week, the figure had hovered around the 150-basis point level.
The fall in CDS premium comes after European leaders agreed on a set of measures that include a write-down of 50 percent of banks' Greek bond holdings, a rescue fund expansion and bank recapitalization. Growing views that China will eventually move to help the region also added on to the renewed optimism.
The cost of insuring South Korean government bonds against default, however, still remains 19 basis points higher compared with that ahead of the Aug. 5 U.S. credit rating downgrade, the data showed.
