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Norske Skog CDS surge wider on earnings -traders

Thu May 8, 2008 3:55am EDT

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LONDON, May 8 (Reuters) - The cost of insuring debt of Norwegian papermaker Norske Skog (NSG.OL) against default rose sharply on Thursday after the company reported a bigger-than-expected fall in core earnings.

Five-year credit default swaps on Norske Skog widened 100 basis points to between 1,025 basis points and 1,050 basis points, traders said. This means it costs just over 1 million euros ($1.5 million) per year to insure 10 million euros of Norske Skog's debt against default.

"(Norske Skog) did say that they were going to be bad, but then they were even worse than they said they were going to be," one of the traders said.

For more on Norske Skog, double click on [ID:nL07710638] (Reporting by Maya Thatcher)



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