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Societe Generale CDS wider on news of trader fraud

LONDON
Thu Jan 24, 2008 4:10am EST

LONDON (Reuters) - The cost of insuring Societe Generale debt rose on Thursday after the bank said it had uncovered a fraud by one of its traders that would have a 4.9-billion-euro ($7.16 billion) negative impact on the group.

Five-year senior credit default swaps on Societe Generale were at 100 basis points by 0725 GMT, traders said, 10 to 20 basis points wider than late Wednesday.

Five-year subordinated credit default swaps on the bank rose 15 basis points to 150 basis points, one of the traders said.

The move wider was capped by a rally in the broader market, driven by hopes for a U.S. rescue plan for bond insurers, with spreads on other financial names moving tighter.

"The market's feeling a bit stronger today," said a second trader.

(Reporting by Richard Barley; Editing by Louise Ireland)


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