Italian, Greek CDS Hit New Highs on Supply, Default Worries

The cost of insuring Italian debt against default rose to a record high on Monday one day before a key bond sale, while Greek credit default swaps also hit historic highs on growing worries that the country may go bankrupt.

Five-year Italian CDS hit a historic high of 505 bps, up 38 bps on the day, according to Markit.

That means it costs 505,000 euros to insure against 10 million euros of exposure to Italian bonds.

Greek CDS also hit a historic high of 3,950 bps, while the Portuguese equivalent also hit a record high at 1,200 bps, up 72 bps on the day.