Standard Chartered Leads Credit Swap Surge for U.K. Banks
- Stock trades below price of $5.1 billion right offering
- Bank's shares at lowest in more than 17 years in London
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As fears grow over the stability of the European banking system, Standard Chartered Plc is being hit by a double whammy in credit markets with investors increasingly worried about the U.K.-based lender’s business in Asia, where it earns most of its revenue.
The cost of protecting the company’s junior debt from default for five years using credit-default swaps almost doubled this year, rising to 479 basis points, the highest since April 2009, from 250 basis points, according to data compiled by Bloomberg. Subordinated bonds are among the riskiest part of a bank’s capital structure.