From Yonhap:
The cost of insuring South Korea's sovereign debt against default surpassed that of France, data showed Sunday, reflecting growing concerns over the local financial market's volatility.
The spread on credit default swaps (CDS) for South Korea reached 202 basis points as of Friday, compared with 197 basis points for France, according to industry data.
The reading marked a wider gap than on Thursday, when the figure first surpassed France's sovereign debt risk by 3 basis points.
The spread on CDS reflects the cost of hedging credit risks on corporate or sovereign debt. A basis point is 0.01 percentage points.
Market watchers said the rise mirrors waning confidence in South Korean government bond credit, given the fact that the country's CDS spread has on average stayed 20 to 30 basis points lower than that of France.
The fact that the figure soared higher than France's even after the eurozone country underwent credit rating cuts of two major lenders, Credit Agricole SA and Societe Generale SA, highlights the rapid rise in South Korea's default risk, they said.
http://english.yonhapnews.co.kr/business/2011/09/25/65/0503000000AEN20110925000500320F.HTML
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