Dec. 12 (Bloomberg) -- The cost of insuring against default on European corporate debt rose, according to traders of credit- default swaps.
Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 11.5 basis points to 761.5 basis points, according to JPMorgan Chase & Co. at 7:30 a.m. in London. An increase signals worsening perceptions of credit quality.
The Markit iTraxx Europe Index of 125 companies with investment-grade ratings was up 3.25 at 176.75 basis points.
A basis point on a credit-default swap protecting 10 million euros ($13.3 million) of debt from default for five years is equivalent to 1,000 euros a year. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.
--Editor: Paul Armstrong
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To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net