Cost Of Insuring Debt by Europe Financials Widening On Exposure Fears

8th Jun 2010 16:26

DOW JONES NEWSWIRES NEW YORK (Dow Jones)--The cost of insuring debt issued by major investment banks in Europe rose Tuesday as fresh fears of lenders' exposure in the continent surfaced. Investors' concern about general weakness among financial firms in the region was driving the market, said Gavan Nolan, credit analyst at data provider Markit in London. Investors are "so nervy that it doesn't take much to move [spreads]," he added. Markit quoted the insurance for debt tied to UBS AG (UBS, UBSN.VX), sold in the form of credit default swaps, at 190 basis points at 9 a.m. EDT, up 8bp on Monday's close and equivalent to $190,000 a year to insure $10 million for five years. Similarly, CDS on Societe Generale SA (SCGLY, GLE.FR) was up 9bp to 201; CDS on Royal Bank of Scotland Group PLC (RBS, RBS.LN) was up 10bp to 252; CDS on Deutsche Bank AG (DB, DBK.XE) was up 4bp to 187; and CDS on Credit Suisse Group (CS, CSGN.VX) rose 9bp to 176. Meanwhile, insurance on Goldman Sachs Group Inc. (GS) was quoted at 190 basis points, 17bp more expensive than Monday's close. The Wall Street Journal reported that Goldman could face more scrutiny and negative headlines after being subpoenaed by the U.S. Financial Crisis Inquiry Commission and being accused of dragging its feet on requests for documentation on legacy deals, particularly those executed with American International Group Inc. (AIG). -By Katy Burne, Dow Jones Newswires; 212-416-3804; [email protected] (END) Dow Jones Newswires June 08, 2010 11:26 ET (15:26 GMT)