3 March 2010
The Debt Default Order of Pain
A list of the 15 countries most likely to default on their debt was recently compiled by Citywire’s Richard Lander based solely on the cost of credit default swaps - in other words the costliest debt to insure in the market, Lander obtained the data from Business Insider: As with all good lists, we go in reverse order of pain:
15. | Bulgaria where CDS cost 214.6 basis points (i.e. 2.146% of the sum you want toinsure or $21,460 per $1m of debt) |
| 14. | Hungary 247 |
| 13. | Vietnam 249.6 |
| 12. | Lebanon 250.2 |
| 11. | Romania 250.9 |
| 10. | Egypt 264.3 |
| 9. | Lithuania 274.9 |
| 8. | Greece 384.4 |
| 7. | Latvia 483.3 |
| 6. | Dubai 497.2 |
| 5. | Iceland 674.6 |
| 4. | Pakistan 877.4 |
| 3. | Ukraine 896.8 |
| 2. | Argentina 1002.5 |
| 1. | Venezuela 1008.3 |
Interesting that for all the publicity and problems, Greece and Latvia don’t make the top 5 and that Iceland barely sneaks in. Asia Europe and South America feature, Africa, Australia and North America don’t. We suspect that the credit markets are underestimating debt risk on all continents. Watch out it’s only going to get uglier.