Photo: US Navy
Markit Credit Research just came out with its Q2 overview of the sovereign CDS market, looking at which countries are seen by investors as having the highest odds of default.Among the lists it put out: The countries who have seen their CDS widen the most. So these aren’t necessarily the worst countries, just the countries who had the worst quarter.
Some are familiar names (Greece, Portugal) and some are shocker like… you guessed it (thank you, debt ceiling!)
Note that the 5Y spread in each case represents the cost of insuring $1 million worth of debt from that country. The countries are ranked by the size of the jump. For many the odds of default still remain small.