Monday, September 12, 2011

Greece Default Risk Jumps to 98%

Greece’s chance of default in the next five years has soared to 98 percent as Prime Minister George Papandreou fails to reassure international investors that his country can survive the euro-region crisis, reports Bloomberg.

It now costs a record $5.8 million upfront and $100,000 annually to insure $10 million of Greek debt for five years using credit-default swaps. The default probability for Greece is based on a standard pricing model that assumes investors would recover 40 percent of the bonds’ face value were Greece to fail to meet its obligations.

Fear of contagion pushed credit-default swaps higher on Portuguese, Italian and French debt. The swaps surged to records, according to CMA,via Bloomberg. Portugal jumped 79 basis points to 1,213, Italy rose 40 basis points to 503 and France was up 11 at 189.

1 comment:

  1. Greek default risk has been 100% for the last 10 years. I don't know why anyone would think that George Papandreou could reassure anyone...It is just a lying little parasite.