Traders Are Betting That These 14 Banks Will Default

As Italian and Spanish sovereign borrowing costs shoot higher, corporate credit default swaps (CDS) have remained remarkably high.
CDS is essentially insurance on a security that pays in the event of a default.
Business Insider analyzed CDS prices on more than 100 publicly traded banks across the U.S., Europe, Middle East, Asia-Pacific, and Latin America.
What we found: for at least 14 banks, the cost to insure debt remains above 500 basis points.
It should be noted that some CDS markets are very illiquid and the quotes can be quite volatile.
What follows is a look at the cost to insure $10,000 of five-year CDS per year. Values are presented in basis points, as firms issue debt in differing currencies.
(Ex: If a CDS on a U.S. corporate issued in dollars is trading at 500 bps, it would currently cost $500 to insure $10,000 for one year).
#14: Bayerische Hypovereinsbank, Cost To Insure $10,000 Sovereign Debt: 507.5 bps
Year-to-Date Change:
-8.6 Percent
5-Year CDS Price (1/1/2012):
551.12 bps
Description:
Hypovereinsbank was acquired by UniCredit in 2005 for €19.2 billion, or $22.8 billion. The bank serves as UniCredit's German arm, employing some 20,000 people through 780 branches. The company's debt still trades separately from UniCredit.
Source: Bloomberg CDS Intraday London
#13: Intesa Sanpaolo SpA, Cost To Insure $10,000 Sovereign Debt: 509.32 bps
Year-to-Date Change:
+5.7 Percent
5-Year CDS Price (1/1/2012):
482.03 bps
Description:
Banca Intesa is the result of the mergers of Banco Ambrosiano Veneto, Cariplo and Banca Commerciale Italiana, forming the largest bank in Italy and one of the largest in Europe. Intesa employs 99,504 employees across four main areas: retail, investment, and private banking, as well as asset management.
Source: Bloomberg CDS Intraday London
#12: UniCredit SpA, Cost To Insure $10,000 Sovereign Debt: 552.9 bps
Year-to-Date Change:
+3.3 Percent
5-Year CDS Price (1/1/2012):
534.99 bps
Description:
UniCredit is one of the largest Italian banks, with operations in 22 euro-area countries. Top and bottom line results have been challenged at the firm, with revenue declining in 2010 and 2011. The company's retail division provides the largest revenue power, accounting for half of UniCredit's $25.2 billion in sales.
Source: Bloomberg CDS Intraday London
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