Moody's downgrades France's rating, CDS spreads widen

On December 16th, Jinshi Data reported that after Moody’s downgraded France’s sovereign credit rating over the weekend, the cost of providing default guarantees for the French government debt using credit default swaps (CDS) rose slightly. UniCredit Research analysts said in a report, “French government bonds may come under pressure, although we believe that the deterioration in ratings has already been reflected in the prices.” Moody’s current rating for France is consistent with the ratings of Standard & Poor’s and Fitch, which should limit the significant deterioration of the Interest Spread of French bonds. Standard & Poor’s Global Market Intelligence data shows that France’s sovereign 5-year CDS has risen to 37 basis points, the high point reached on December 5th.