Romania"s risk premium nearly doubles

Romania"s 5-year CDS rate (ed. note: Credit Default Swaps) nearly doubled, in Q3, rising to 420 basis points, according to a report published yesterday by "CMA Data Vision".

In Q2, CDSs, which measure the cost of ensuring against sovereign default risk, stood at 245 basis points. Romania kept its ranking of 17 in the world"s riskiest countries, compiled by CMA Data Vision.

The Cumulative Probability of Default (CPD) has increased to 26.2% in the third quarter, up from 16.2%, in the previous quarter.

Ranked first in the chart of the world"s riskiest countries, is Greece, which saw its CDS climb to 5,156 basis points in Q3. Its Cumulative Probability of Default reached 90.6%. Portugal came in second, with a CDS level of 1,165 basis points and a cumulative probability of default of 61.3%.

"Western Europe continues to face a difficult year, because the sovereign debt crisis continues to worsen. The talks on the plan to rescue Greece, the downgrades of Italy and Spain and concern over the USA and the way the crisis is being handled, have contributed a little to the improvement of the market sentiment on European sovereign debt, and the Euro was also faced with selling pressure", the report states.

Countries which are considered riskier than Romania include Italy (CDS - 453 basis points), Hungary (CDS - basis points) and Spain (CDS - 372 basis points).

"Italy and Hungary joined the top ten riskiest countries, because the cost of insuring debt has significantly increased on all the global credit markets", the report by "CMA Data Vision" says.

The document also shows that "for the first time since the end of Q2 2010, a change in the top three least risky countries occurred".

Thus, Norway remains the least risky country (CDS - 50 basis points), whereas the United States climbed from the seventh spot to the second, with a CDS level of 52 basis points. Sweden ranks third, with 59 basis points on its CDS.