Bonds News

UPDATE 1-U.S. 5Y Treasury CDS price highest since April-CMA

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NEW YORK, Feb 4 (Reuters) - The annual cost of insuring U.S. government debt against a potential default in a five-year period rose on Thursday to its highest since April 2009 amid jitters over rising sovereign risks, according to CMA DataVision.

In the credit default swap market, the cost to insure against a potential U.S. Treasury default grew to 49.4 basis points, the highest since April 8, 2009 when it was 52 basis points, the credit data firm said.

This meant it would cost $49,400 a year to insure $10 million of Treasury exposure over a five-year period.

The five-year Treasury CDS ended at 46.7 basis points on Wednesday in New York. It was far below the record level set at the height of the global credit crisis in early 2009 when it was close to 100 basis points.

There have growing concerns over the U.S. government’s burgeoning deficit and whether that will endanger Treasuries’ coveted AAA-rating and its global benchmark status.

Reporting by Richard Leong, Editing by W Simon