Paul, i bot some RBS yesterday. Unfortunately didnt get up early enuf to dump into the pre-market buyers.
EURO CORP-Spreads wider, crisis fears offset rate cuts
Reuters - 08/10/2008 17:20:49
LONDON, Oct 8 (Reuters) - European credit spreads widened on Wednesday as a boost from concerted global interest rate cuts earlier in the day wore off, overcome by worries about recession and the soundness of the world banking system.
Credit default swaps on British banks continued tighter, however, following the government's multi-billion pound plan to inject capital and liquidity into the banking system.
By 1507 GMT, the investment-grade Markit iTraxx Europe index <ITEEU5Y=GF> was at about 129 basis points, according to data from Markit, 4 basis points wider versus late on Tuesday. The index had tightened to 117.5 basis points shortly after central banks announced a 50 basis point cut at midday.
"We have entered a new and potentially very dangerous phase of the banking crisis," wrote Nigel Myer, a banking credit analyst at Dresdner Kleinwort in a note to clients.
"No one quite knows what the rules are. Creditors to banks in danger of failing might be alright, they might all be wiped out or they might actually benefit from a sovereign guarantee. In recent weeks all three have occurred."
Until creditors do come to understand what their risks are, there is likely to be little incentive for interbank lending to return to normal, he said. "Further intervention by the authorities looks necessary to stabilise money markets and prevent more liquidity problems."
The Markit iTraxx Crossover index <ITEXO5Y=GF>, made up of 50 mostly "junk"-rated credits, was at 638 basis points, 23 basis points wider.
In the UK, CDS on five-year senior debt of Royal Bank of Scotland (RBS.L) were at 210 basis points, about 60 basis points tighter on the day, a trader said.
Comparable CDS on Barclays (BARC.L) were offered at 150 basis points, around 70 basis points tighter. CDS on HBOS (HBOS.L) were about 30 basis points tighter at 202 basis points, the trader said.
The Markit iTraxx five-year senior financials index <ITEFA5Y=IE> was at about 113.5 basis points, the trader said, about 6.5 basis points tighter on the day. (Reporting by Jane Baird and Catherine Evans; Editing by David Holmes) |
