The 18 Countries Most Likely To Default


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Recent protests and revolutions in the Middle East are driving change in the CDS market, pushing investors to speculate on, and buy insurance on, countries at risk.Our latest survey of the data from CMA Datavision and Bloomberg shows that Europe remains in the crosshairs of investors, with little confidence eurozone leaders are going to sort out a package that will provide certainty for the region.

While Europe and the Middle East are making the headlines, some old risks remain, including big South American sovereigns.

For this list, we’ve ranked countries by the market price to insure their debt. Their may be other methods, but this gives a good take on the current market view of the fiscal and political stability of these countries.

Click here to see the countries >



#18 Spain

5-Year CDS spread: 245.91

Recent turmoil: Spain remains at the centre of the European sovereign debt crisis, and is in the process of restructuring its banking sector.

Source: CMA Datavision, Bloomberg

#17 Bulgaria

5-Year CDS spread: 248.28

Recent turmoil: Bulgaria has had to engage in austerity measures in a battle to control its fiscal deficit.

Source: CMA Datavision, Bloomberg

#16 Iceland

5-Year CDS spread: 254.46

Recent turmoil: Iceland is still reeling from the fiscal crisis brought on by a banking sector crisis.

Source: CMA Datavision, Bloomberg

#15 Lithuania

5-Year CDS spread: 260.00

Recent turmoil: After a horrendous recession during the financial crisis, Lithuania has started to rebound, with growth of 4.8% in Q4.

Source: CMA Datavision, Bloomberg

#14 Romania

5-Year CDS spread: 285.00

Recent turmoil: Romania's recession continued through 2010, with GDP falling 1.3%.

Source: CMA Datavision, Bloomberg

#13 Croatia

5-Year CDS spread: 286.32

Recent turmoil: Croatia has been hit by anti-government protests and is still reeling from the financial crisis downturn.

Source: CMA Datavision, Bloomberg

#12 Hungary

5-Year CDS spread: 304.19

Recent turmoil: Hungary was downgraded in December, and is struggling to deal with its fiscal problems. It just announced new plans this week.

Source: CMA Datavision, Bloomberg

#11 Bahrain

5-Year CDS spread: 313.65

Recent turmoil: Bahrain is experiencing protests similar to those facing other parts of the Middle East, and is dealing with an oppressed Shiite majority that is driving the movement.

Source: CMA Datavision, Bloomberg

#10 Lebanon

5-Year CDS spread: 360.00

Recent turmoil: Lebanon has recently seen protests and political upheaval.

Source: CMA Datavision, Bloomberg

#9 Vietnam

5-Year CDS spread: 365.00

Recent turmoil: Vietnam has been forced to devalue its currency in a bid to deal with its debt problems.

Source: CMA Datavision, Bloomberg

#8 Egypt

5-Year CDS spread: 370.00

Recent turmoil: Egyptians have kicked out their president, and are now being stewarded by a military government.

Source: CMA Datavision, Bloomberg

#7 Dubai

5-Year CDS spread: 455.00

Recent turmoil: Dubai continues to suffer from an oversupply of real estate, which threatens the stability of the whole country.

Source: CMA Datavision, Bloomberg

#6 Ukraine

5-Year CDS spread: 460.75

Recent turmoil: Growth slowed in Q4 2010 for the Ukraine, but growth of 4-5% is expected in 2011.

Source: CMA Datavision, Bloomberg

#5 Portugal

5-Year CDS spread: 460.88

Recent turmoil: Portugal looks to be well short of €20 billion it needs to pay its bills in 2011.

Source: CMA Datavision, Bloomberg

#4 Ireland

5-Year CDS spread: 569.88

Recent turmoil: Ireland continues to struggle with its banking sector crisis, which has now burdened the government with non-performing loans and a EU-IMF bailout.

Source: CMA Datavision, Bloomberg

#3 Argentina

5-Year CDS spread: 646.47

Recent turmoil: Argentina is yet again struggling with high inflation, years after the country faced crisis.

Source: CMA Datavision, Bloomberg

#2 Greece

5-Year CDS spread: 956.27

Recent turmoil: Greece recently faced another round of protests over the governments austerity measures.

Source: CMA Datavision, Bloomberg

#1 Venezuela

5-Year CDS spread: 1170.92

Recent turmoil: Oil production is down in Venezuela, endangering the government's ability to pay its debts.

Source: CMA Datavision, Bloomberg

So what does sovereign default look like?

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