The cost to protect Bank of America Corp. debt surged to a record and a benchmark gauge of U.S. corporate credit risk climbed to a seven-week high as Europe’s sovereign fiscal crisis intensified, BusinessWeek reports.
The Markit CDX North America Investment Grade Index of credit default swaps, which investors use to hedge against losses on company debt or to speculate on creditworthiness, added 5.9 basis points to a mid-price of 146.4 at 4:57 p.m. in New York, the highest since Oct. 4, according to Markit Group Ltd.
Investors pushed the gauge higher on concern that Europe’s bond market turmoil, which began more than two years ago in Greece, now risks engulfing the region’s biggest economy. Germany failed to get bids for 35 percent of 10-year bonds offered for sale today, sending its borrowing costs higher and the euro lower. French and Belgian bonds fell as the cost to protect European government debt against default rose to a record.
Find out more at http://www.businessweek.com/news/2011-11-24/bofa-swaps-soar-to-record-as-u-s-company-credit-risk-increases.html
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