Bloomberg News

U.S. Corporate Credit Risk Benchmark Climbs to Highest This Week

September 30, 2011

Sept. 30 (Bloomberg) -- A benchmark gauge of U.S. corporate credit risk rose to the highest level this week, as declines in German retail sales and Chinese manufacturing signaled global growth is slowing, exacerbating concerns that company creditworthiness may deteriorate.

The Markit CDX North America Investment Grade Index, which investors use to hedge against losses on corporate debt or to speculate on creditworthiness, rose 1.8 basis points to a mid- price of 141.5 basis points as of 12:17 p.m. in New York, according to index administrator Markit Group Ltd.

The index, which typically rises as investor confidence deteriorates and falls as it improves, is headed for a weekly increase of 0.8 basis point.

Credit swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

--Editor: Mitchell Martin

To contact the reporter on this story: John Parry in New York at

To contact the editor responsible for this story: Pierre Paulden at

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