In spite of an escalating civil war on its doorstep, Lebanon’s sovereign debt is still seen by financial markets as a less risky investment than the debt of Spain, according to the pricing of credit default swaps.
The cost of insuring against a default in Lebanon is trading at 498 basis points, cheaper than the equivalent insurance for the debt of Spain, which traded at 523bp on Wednesday, according to Markit, the data provider. Lebanon’s credit default swaps are also slightly cheaper than those of Ireland and Italy but priced higher than that of Portugal.
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