Glencore Is Having a Terrible Day, Credit Default Swap Edition
Big banks are now quoting Glencore CDS 'upfront.'
Glencore Takes Brunt of Global Commodities Rout
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Glencore shares fell 31 percent on Monday. Its bonds are trading like junk and the cost of insuring them is soaring. Five-year credit default swap spreads on the commodities giant's debt jumped from 550 basis points on Friday to 757 bps today, indicating investors are willing to pay more for protection against default.
Worse than the blow-out in CDS spreads, arguably, is that big banks have started quoting CDS prices "upfront."