BRIC ‘Catch Up’ Shows Record-Low Yields May Fall: Russia Credit

Russia’s economic rebound is sending the cost of protecting against a default to the cheapest level relative to Brazil in five months, a sign record-low yields for Prime Minister Vladimir Putin’s government have further to fall.

Five-year credit-default swaps on Russian debt dropped 25 basis points this month to 134.5, narrowing the gap over Brazil to 36 yesterday, the tightest since May, according to CMA, a data provider. Russia’s record-low 3 percent yields on dollar bonds due in 2015 are 80 basis points above the same-maturity notes from Brazil.