The spread on one-year credit default swaps covering U.S. debt has dropped 7 basis points, to 51, according to Markit Group. The spread reached an intraday high of 75 basis points Wednesday, the highest level since July 2011. Five-year CDS have dropped 5 basis points, to 32.
Five-year credit default swaps for State Bank of India have jumped 45 basis points from their close Friday, to 351 basis points, the highest level in 14 months, according to Markit Group. The increase comes as India's rupee hits a record low against the U.S. dollar. "The CDS move is understandable," Societe Generale analyst Guillaume Salomon said. "When the currency is under pressure, it raises the question of how they will finance the deficit, hence the reason CDS is widening."
A deal struck by Michael Dell and Silver Lake Partners with a Dell special committee to take the company private has widened Dell's credit default swap spreads 73 basis points, to 406, according to Markit Research. Dell CDS spreads were 226 basis points narrower in January.
Viacom's increase of a stock-repurchase plan to $20 billion has widened credit default swaps spreads 20 basis points, to 75, according to Markit Research. Friday was the company's worst day in the CDS market since May 2008.