Credit default swap spreads rate New Zealand sovereign debt as low risk

Credit default swap spreads rate New Zealand sovereign debt as low risk

Credit default swap spreads measure the risk associated with fixed interest bonds.

Markets track these spreads as indicators of the probability of default.

We track an index of these spreads for investment grade 5 year corporate debt issues in the US, in Europe, and in Australia as published by Markit in their iTraxx service.

There are a huge range of securities covered in the Markit service, including for sovereign bonds.

Today, the New Zealand Government 5 year CDS spread is 49.19 and that compares as follows:

Government CDS spreads
   
Sweden 21.06
Germany 32.67
US 32.01
Australia 47.08
New Zealand 49.19
China 60.62
France 74.66
Ireland 196.71
Spain 335.00
Portugal 849.00
Argentina 1,649.00

Greece is not on this list because it defaulted in March 2012.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.