Saudi credit default swaps soar on U.S.-Iran crisis - Reuters:
The cost of insuring against a potential debt default by Saudi Arabia has soared by a sixth since Friday’s killing by a U.S. drone of Iranian commander Qassem Soleimani, bearing the brunt of a broader reaction in Middle Eastern markets.
Conventional spreads on five-year Saudi credit default swaps (CDS) were at 64 basis points on Monday, up from 55 bps on Jan. 2, according to IHS Markit.
Saudi Arabia is Iran’s arch enemy in the region, and that jump was slightly higher than in September last year after an attack on the kingdom’s oil facilities that in its initial phases halved its oil output.
Tehran has called the U.S. strike at Baghdad airport an act of war and Iranian commanders have issued a range of retaliation threats since, though they have not offered specifics about how they will respond.
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