Credit Suisse Group AG’s bonds fell to levels typically associated with distress on Wednesday.
The bank’s 6.373% debt due 2026 fell US$19.75 to US$68 per dollar at 9:18 am in New York, with a spread of about 2,000 basis points, according to Trace.Its 9.016% coupon debt due November 2033 plunged nearly $31 to $65 on the dollar..
Several other Credit Suisse bonds plunged more than $10 to the dollar on Wednesday, sending New York credit trading down.with spreads shooting above 1,000 basis points along the maturity curve.
Credit markets see trading in bonds with a spread of more than 1,000 basis points over government debt in trouble. The cost of insuring Credit Suisse’s debt against short-term default previously reached a level that indicated serious investor concerns.
A key measure of credit risk, the CDX investment grade, eroded the previous day’s gains. The index, which rises with rising credit risk, gained about eight basis points to trade at 93.1 basis points at 9:18 am New York time, the highest level since early November.
