The cost of insuring against default on European corporate debt rose, according to BNP Paribas SA.
Contracts on the Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings jumped 14 basis points to 656 at 9:51 a.m. in London, and is heading for a fourth weekly rise. An increase signals deterioration in perceptions of credit quality.
The Markit iTraxx Europe Index of 125 companies with investment-grade ratings rose 2.5 basis points to 136.5 basis points.
The Markit iTraxx Financial Index linked to senior debt of 25 banks and insurers increased six basis points to 242 and the subordinated index climbed 5.5 to 390.5.
A basis point on a credit-default swap protecting 10 million euros ($13.2 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.
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