LONDON, March 14 The cost of insuring Greek debt
against default fell on Monday, leading a rally in most
lower-rated euro zone sovereign CDS after European leaders
struck an unexpected deal to strengthen the bloc's bailout fund.
Euro zone leaders agreed to increase the full lending
capacity of the European Financial Stability Facility and allow
it to buy bonds of distressed countries in primary markets and
lower the interest rate on Greece's bailout [ID:nL3E7EB0D7]
Five-year credit default swaps (CDS) on Greek government
debt fell by over 100 basis points to 940 bps, according to data
monitor Markit. This means it costs 940,000 euros to protect 10
million euros of exposure to Greek bonds.
Irish CDS was the exception among the peripheral euro zone
countries, rising 2 bps to 602 bps after the terms of its
bailout deal were not improved at the summit.
(Reporting by William James)