European credit derivatives tightened

European credit derivatives tightened on Tuesday, with banks leading the way on reports some US banks may repay bailout money and the UK is talking with investors about selling stakes in part-nationalised banks. By 1533 GMT, the investment-grade Markit iTraxx Europe index was at 126.75 basis points, according to data from Markit, 9.25 basis points tighter versus late on Monday and holding on to gains early in the day.
The Markit iTraxx Crossover index, made up of 45 mostly "junk"-rated credits, was at 758 basis points, 32 basis points tighter. Five-year credit default swaps were tighter by more than 12 basis points on BNP Paribas at around 71 basis points; by more than 10 basis points on Royal Bank of Scotland at around 170 basis points; and by nearly 7 basis points on Deutsche Bank at around 98 basis points, according to Markit data.