South Africa, Turkey CDS surge to highest since financial crisis

LONDON, April 3 (Reuters) - The cost of insuring exposure to Turkey and South Africa's sovereign debt soared to their highest since the global financial crisis on Friday, as worries continued about their vulnerability to the coronavirus fallout.

Five-year South Africa ZAGV5YUSAC=MG credit default swaps rose to a fresh 11-year high of 506 basis points, up from 486 basis points at Thursday's close, according to IHS Markit data.

Turkey CDS TRGV5YUSAC=MG reached 631 bps, a rise of 15 bps, to the highest point since October 2008, the data showed. Separate data had shown the country's FX reserves had fallen $1 from the previous week.

The iTraxx Europe crossover index ITEXO5Y=MG of credit default swaps (CDS), which measures the cost of insuring exposure to a basket of sub-investment grade European companies, climbed to 627 bps, up from 612, on Thursday.

The index is up from record lows of just over 200 bps it hit in January.

Italian banks also saw a climb in risk cost, with Banca Monte dei Paschi's BMPS.MI CDS BMPS5YEUAM=MG rising 43 bps to 455 bps, its highest in more than a year, UniCredit's CRDI.MI, UNIC5YEUAM=MG climbing to 180 bps and Intesa Sanpaolo's ISP.MI, BCIN5YEUAM=MG reaching 177 bps.

(Reporting by Tom Arnold; editing by Marc Jones)

((Tom.Arnold@thomsonreuters.com; +442075428510; Reuters Messaging: tom.arnold.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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