Thursday, July 10, 2008

CDS spreads widen for mortgage finance companies

Credit default swaps for Fannie Mae and Freddie Mac widened due to continuing concerns about the mortgage finance companies' capital.

The cost of insuring Fannie Mae and Freddie Mac debt for five years with credit default swaps rose to about 80 basis points, or $80,000 a year to protect $10 million of debt, up from about 75 basis points earlier.

Credit Default Swaps

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