Pakistan 5-year credit default swaps, used to insure against restructuring or default, widened by at least 30 basis points on Thursday after Benazir Bhutto was killed in a gun and bomb attack. CDS spreads widened by 30 basis points to 400-430 basis points, said one New York-based trader.
"We''''ve seen all the headlines and the CDS are 30 basis points wider," the trader said. Traders in London said it was hard to find prices on Pakistani Eurobonds in illiquid trading following Christmas holidays. "Everyone is struggling to get prices, everyone is trying to work out the new level at which the bonds should be trading," said one trader.
The Pakistan rupee was last quoted at 61.30 per dollar, but was off 3-year lows hit early on Thursday. Emerging sovereign debt spreads were one basis point wider from the US close at 223 bps over US Treasuries, from around 219 bps shortly before the news of Benazir''''s death and before data showing weaker than expected US durable goods orders in November. Global emerging equities showed little reaction, rising 0.52 percent from the US close.
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