Wall Street Journal
March 29, 2011
The debt insurance costs for Portugal and Greece rose after their credit ratings were downgraded by Standard and Poor’s Corp.
The S&P move brought its rating on Portugal to one notch above junk status, and its five-year credit default swap spread felt the effects of the decision more than Greece, which S&P already rated in junk territory.
Portugal’s CDS spread jumped to 5.55 percentage point in reaction to the downgrade from 5.40percentage point earlier and a closing level Monday at 5.39 percentage point, according to data-provider Markit.
A rise of one-hundredth of a percentage point in the cost of five-year CDS equates to a $1,000 rise in the annual cost of protecting $10 million of debt for five years.
The CDS level on Greece moved out to 9.70 percentage point from 9.65 percentage point earlier and closed at 9.67 percentage points.