March 9, 2020 / 11:30 AM / 4 months ago

Oil shock, coronavirus spread sends Saudi, Italy CDS sharply higher

LONDON, March 9 (Reuters) - The cost of insuring exposure to debt issued by governments and banks rose sharply on Monday with those at the centre of the coronavirus outbreak and oil exporters seeing levels spike to multi-month highs.

Saudi Arabia, which started an oil price war over a failure to agree a production cut with Russia at last week's OPEC meeting, saw its five-year credit default swaps (CDS) jump 58 basis points (bps) from Friday's close to 154 bps. That was the highest level since 2016, according to data from IHS Markit.

Fellow crude exporter Russia saw its CDS jump 51 bps to 161 bps, its highest level since November 2018.

Meanwhile CDS for Italy - at the centre of the virus outbreak in Europe - jumped by 37 bps to 202 bps, its highest level since August. The country's lenders UniCredit and Intesa Sanpaolo, which are heavily exposed to Italian government bonds, saw levels spike by more than 40 bps. (Reporting by Karin Strohecker; Editing by Dhara Ranasinghe )

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