Euro zone CDS costs spike on Greece contagion fear

NEW YORK (BestGrowthStock) – The cost of protecting the debt of European countries including Portugal, Spain and Ireland jumped on Tuesday, even as Greece’s debt rallied, on concerns about contagion from Greece’s fiscal problems.

European finance ministers on Sunday triggered a record 110 billion euro ($147 billion) bailout for debt stricken Greece, though markets have continued to weaken on concerns that Greece and other European countries still face fiscal challenges.

The cost to insure the debt of Portugal jumped by 82 basis points on Tuesday to 366 basis points, or $366,000 per year for five years to insure $10 million in debt, according to Markit Intraday.

Spain’s CDS costs also rose by 49 basis points to 212 basis points, while Ireland and Italy’s CDS costs jumped by 36 basis points and 16 basis points, respectively, to 225 basis points and 158 basis points, Markit data show.

Credit default swaps backed by Greece’s debt, meanwhile, rallied by 28 basis points to 698 basis points, Markit said.

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(Reporting by Karen Brettell; Editing by James Dalgleish)

Euro zone CDS costs spike on Greece contagion fear