Wednesday, July 18, 2007

Corporate Bond Risk Soars to 2-Year High on Bear Stearns Hedge Fund Losses

(Bloomberg) -- The risk of owning corporate bonds
soared to the highest in two years in Europe after Bear Stearns
Cos. said investors in two U.S. subprime hedge funds will get
little or no money back, credit-default swap prices show.

Contracts on 10 million euros ($13.8 million) of debt
included in Europe's iTraxx Crossover Series 7 Index jumped as
much as 36,000 euros to 324,000 euros, according to Deutsche
Bank AG. The risk premium is the highest since 2005 when General
Motors Corp. and Ford Motor Co. had their ratings cut to high
risk, high-yield.


Read more at Bloomberg Bonds News

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