SNS Reaal Nationalization Triggers Jump in Junior Bank Debt Risk
This article is for subscribers only.
SNS Reaal NV’s nationalization triggered a surge in the cost of insuring against default on European junior bank debt amid concern the move will encourage governments to impose losses on bondholders.
The Markit iTraxx Financial Index of credit-default swaps on the subordinated bonds of 25 banks and insurers jumped as much as 15 basis points, the most since Sept. 26, to a more than seven-week high of 265, according to data compiled by Bloomberg. The move was led by contracts on UniCredit SpA, which rose 14 basis points to 518.