LONDON – The cost of insuring against a Russian government debt default soared by almost 50% on Monday and premiums on other emerging market countries, junk bonds and swathes of Europe’s banks all jumped too as the Ukraine conflict continued to worsen.
Russian 5-year Credit Default Swaps which pay out in the event of a default leapt to a record 2,619 basis points compared to 1,725 basis points on Friday, data from IHS Markit showed.
Turkey’s CDS were also up 17 bps at 677 bps, South Africa’s rose 4 bps to 244 bps, China’s climbed 4 bps to 64 bps.
The spread on the iTraxx European Crossover index, which measures the cost of insuring exposure to a basket of junk-rated European company debt extended its rise as it jumped 30 bps to its highest since May 2020 at 426 bps. Another iTraxx index which measures the cost of insuring exposure to senior bonds from banks and other financial issuers rose 9 bps to 105 bps, also its highest since May 2020.
(Reporting by Marc Jones and Yoruk Bahceli; editing by Danilo Masoni)