Commerzbank credit protection costs double in a week

Last Friday, an e-mail from Merrill Lynch’s corporate credit department was sent to S&P asking about rumours concerning Commerzbank's credit derivatives trading position. This bumped up the cost of Commerzbank five-year senior protection to 190bp-mid. Five-year senior protection on Commerzbank was trading around 115bp at the end of September. However, S&P said its action did not relate to recent market concerns about the bank's capital ratios or liquidity, which it said were "unfounded". The