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Greece now second-riskiest world sovereign – CMA July 5, 2010

Posted by Yilan in Yunanistan.
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A woman waves a Greek flag in front of parliament during a protest  against the government's austerity measures in Athens May 3, 2010.  REUTERS/John Kolesidis

A woman waves a Greek flag in front of parliament during a protest against the government’s austerity measures in Athens

A deterioration of Greece’s debt in the second quarter of this year helped it become the world’s second-riskiest sovereign in a survey by credit default monitor CMA DataVision published on Monday.

Greek government bonds slipped from ninth position in the survey in the first quarter of the year, CMA said.

The country’s credit default swap (CDS), a gauge of the cost of insuring state debt against default within five years, mushroomed to 1,003.4 basis points in the second quarter. That translates into a 55.6 percent risk of default.

But Venezuela, on a CDS of 1,305.7 bps and 27 percent upfront fee, remained the riskiest sovereign credit with a default risk of 58.7 percent.

Iceland and Egypt exited the top-ten riskiest sovereigns league, while Romania and Bulgaria whose banks are heavily exposed to Greece, were dragged into the top ten at positions eight and ten respectively.

Among the world’s safest sovereigns first and second places remained occupied by Norway and Finland, followed by an improvement in the credit of the United States at third place, from tenth in the previous quarter.

But the euro zone’s safest haven bonds, German Bunds, and The Netherlands, slipped in the rankings. Germany was sixth-safest compared with third-safest in the first quarter, while Dutch debt was eighth, slipping from sixth.

The worst performing sovereigns in the quarter ended June were Greece, whose percentage rise in CDS was 190 percent, followed by Belgium, whose CDS rose 168.5 percent.

Spain’s CDS was third worst-performing with a 129.2 percent jump, Portugal fourth, with a 127.3 percent rise, and France fifth with a 112.3 percent gain in cost of debt protection.

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