Credit risk surged in Europe as concern grew that the U.K. will vote to leave the European Union.

The Markit iTraxx Europe Senior Financial Index of credit-default swaps on 30 banks and insurers rose six basis points to 106 basis points, the highest since Feb. 29, according to data compiled by Bloomberg. The cost of insuring high-yield bonds jumped to the highest since March and the region’s investment-grade benchmark climbed to a more than two-month high.

Anxiety over the prospect of a British exit from the EU roiled financial markets after a poll on Friday showed a 10 percentage-point lead for the leave campaign and other surveys released over the weekend signaled the outcome was too close to call. Investors are bracing for the U.K.’s June 23 referendum on EU membership along with monetary policy reviews this week in the U.S. and Japan.

“The weakness in credit markets is mostly down to concerns about Brexit,” said Iain Buckle, an Edinburgh-based investment manager at Kames Capital, which oversees 58 billion pounds ($82 billion) of assets. “As we move closer to the event and investors think it’s going to be a close call, they’re looking to hedge their credit exposure.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE