Thursday, January 10, 2008

financial companies CDS widens

--The worries are crystallized in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 market for credit-default swaps. The annual cost of protection against cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 default of $10 million of Citigroup debt for five years has jumped to $94,000, up from $67,000 Dec. 31 and $27,000 in October. The cost of buying protection for Merrill Lynch debt is $164,000, up from $140,000 at year's end and $60,000 in October. The cost of Bear Stearns Cos.' default protection has jumped to around $234,000 from $76,000 three months ago. --There is even greater concern about mortgage lenders like Countrywide, which this week denied bankruptcy rumors but said delinquencies on loans it made are still rising. To purchase credit-default insurance on $10 million of Countrywide debt, investors must pay $3 million upfront and $500,000 annually. The upfront payment was $2 million Monday. A month ago, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same insurance cost $776,000 annually with no upfront payment, according to CDR. The cost of protection on debt issued by Brazil is $115,000 annually, with no upfront costs. It is $540,000 on Pakistan, also with no upfront costs. --Investors worry that additional losses and write-downs will force bond insurers and banks to raise additional capital. Anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r problem: More than $600 billion of corporate debt is maturing this year and will need to be refinanced. Much of it is coming from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 financial sector. --Some investors argue that financial institutions could face losses in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 credit-default market itself. Banks and bond insurers have written billions of dollars of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 credit protection traded in this market. If defaults materialize, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365y will be on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 hook to make good on additional debts. --Bill Gross, chief investment officer at Allianz SE's Pacific Investment Management Co., or Pimco, argues that losses on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se instruments could amount to $250 billion or more if corporate defaults climb back to historical norms. Mr. Gross argues cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 losses will put pressure on lenders to curb lending. He has been betting on an economic downturn. • The CDX.NA.IG investment grade index, which contains 125 North American investment grade credits, closed at an all time wide yesterday and surpassed cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 100bp mark in intraday trading this morning.

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