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Insurance company credit spreads rally after rate cuts

Wed Oct 8, 2008 8:45am EDT

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NEW YORK, Oct 8 (Reuters) - Credit spreads for insurance companies rallied on Wednesday in the wake of a series of rate cuts led by the U.S. Federal Reserve and global central banks.

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Credit default swaps spreads for companies such as XL Capital, Metlife Inc, Hartford Financial and Prudential Financial Inc all posted large gains, according to CMA DataVision data.

Five-year credit default swaps of XL Capital (XL.N) fell to 683 basis points, or $683,000 a year to protect $10 million of debt, down from 807 basis points on Tuesday, according to data from CMA DataVision. (Reporting by Walden Siew; Editing by Theodore d'Afflisio)

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