Credit-Default Swaps in U.S. Fall After Bond Sales in Europe

A gauge of U.S. company credit risk fell as Spain and the Netherlands sold debt, easing concern Europe’s debt crisis is spreading.

The Markit CDX North America Investment Grade Index, a credit-default swaps benchmark that investors use to hedge against losses on corporate debt or to speculate on creditworthiness, fell 0.9 basis point to a mid-price of 100 basis points at 8:04 a.m. in New York, according to prices compiled by Bloomberg.

The measure decreased after Spain sold 1.9 billion euros ($2.5 billion) of bills, while the Netherlands auctioned 2 billion euros of securities. New home sales in the U.S. probably rose in March, according to the median estimate of economists surveyed by Bloomberg before a Commerce Department report today.

The credit swaps index typically falls as investor confidence improves and rises as it deteriorates. The contracts pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

To contact the reporter on this story: Sridhar Natarajan in New York at

To contact the editor responsible for this story: Alan Goldstein at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.