Egypt Riskier Than Iraq in Swaps as Protests Spread to Mubarak

Egypt Riskier Than Iraq in Swaps as Protests Spread to MubarakLatest news update about;Egypt Riskier Than Iraq in Swaps as Protests Spread to Mubarak;Jan. 27 (Bloomberg) -- Egypt is riskier than Iraq in the market for credit default swaps for the first time in at least a year as thousands protest to denounce President Hosni Mubarak.
The cost of protecting Egyptian debt against default for five years with the contracts jumped 41 basis points, or 0.41 percentage point, this week to 345 yesterday, compared with 328 for Iraq, according to prices from CMA, a data provider in London. Just last week, Iraqi swaps cost 19 basis points more than Egypt’s,Egypt Riskier Than Iraq in Swaps as Protests Spread to Mubarak and in June, an average 240 basis points more, as Iraq recovered from the U.S.-led invasion in 2003.
The unrest, inspired by the revolt that toppled Tunisia’s leader, “does raise political risks,” said Eric Fine, a portfolio manager in New York who helps Van Eck Associates Corp. oversee $3 billion in emerging-market assets. “If this is a revolution the price of risk for Egypt could go much higher, and if it’s a failed one” the cost will drop to 300 basis points and probably 250, Fine said in a phone interview.Egypt Riskier Than Iraq in Swaps as Protests Spread to Mubarak