Credit default swaps on western European nations (at an average of over 200 bps) has exceeded that of CDS on central and eastern European, Middle Eastern and African nations for the first time according to the WSJ.
The iTraxx SovX Western Europe index, which allows investors to buy or sell default protection on debt issued by 15 western European sovereigns, was at 203 basis points Wednesday afternoon, according to index owner Markit. The SovX CEEMEA index was at 199 basis points.
SovX Western Europe has risen steadily since mid-October last year on worries about the health of peripheral euro-zone sovereigns and about whether bondholders will be forced to take losses under a permanent euro-zone crisis mechanism to be introduced in 2013.
However, before this week, it had never traded higher than the CEEMEA index, which includes Hungary, Poland, Turkey, the Czech Republic, Russia, Ukraine, Qatar, and Abu Dhabi.
Prices and constituents of the iTraxx SovX indices can be found on Markit’s website. The iTraxx SovX Western Europe Series 4 index includes CDS referencing the sovereign debts of Germany, France, Greece, Ireland, Belgium, Denmark, Norway, Spain, Sweden, Netherlands, Portugal, Austria, Finland, Italy and the UK. The iTraxx SovX CEEMEA Series 4 index includes CDS referencing the sovereign debts of Abu Dhabi, Czech Republic, Bulgaria, Croatia, Hungary, Kazakhstan, Latvia, Lithuania, Poland, South Africa, Turkey, Romania, Russia, Qatar and the Ukraine.