Meet Putin’s New, and Poor, Neighbors in the Debt Market - Bloomberg

Meet Putin’s New, and Poor, Neighbors in the Debt Market - Bloomberg:



"Just how much has President Vladimir Putin’s Ukraine incursion eroded investor confidence in Russia?



Consider the names that the country is now surrounded by in the market where bondholders buy protection against default: Lebanon, El Salvador and war-torn Iraq. With investors charging 3.8 percent a year to insure against a halt in Russian debt payments, those three countries -- all of which either have junk ratings or none at all -- trade at the closest levels to Putin’s government in the credit-default swaps market.



The cost of Russian credit-default swaps rose for the 10th straight day to a five-year high of 381 basis points on Dec. 5, the longest run of increases since May 2012, according to data compiled by Bloomberg. The country is heading toward recession as U.S. and European Union sanctions over Putin’s actions in Ukraine crimp access to foreign funding, while crude oil, the nation’s chief export earner, plunges into a bear market."



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