Hungary CDS spread performs outstanding jump

Hungary’s CDS has risen the most today, CMA Datavision figures showed.

The outstandingly negative performance does not come as a surprise considering the market reactions of the past few days. Investors are finding Hungarian assets increasingly risky, as chances for a bailout deal with the IMF are slimming.

Hungary’s 5-yr CDS spread was around 635 basis points on Tuesday afternoon (and hit 645 bps earlier in the day), up 20 bps from the last closing value. The fresh data also indicates that the risk of Hungary’s sovereign default is only a hair from the recently set record (around 650 bps).

The 635-bp 5-yr Credit Default Swap means market players are asking an annual fee of around EUR 635,000 on every EUR 10 m worth of Hungarian debt for a five-year period as an insurance. The higher the spread, the higher the chances are of non-payment, i.e. default.

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