Moody’s downgraded HVB to A3 stable from A1. Senior credit protection for HVB widened 5bp to 105bp-mid following the announcement, with subordinate protection widening 15bp to 210bp-mid. During the course of the week, the cost of protection continued to widen, reaching levels of 128bp-mid for senior and 260bp-mid for subordinate today. The cost of protection for other European banks remained stable. Five-year senior protection for Deutsche Bank and Dresdner Bank are currently trading at 40bp
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