CDS spreads on automakers widen after bail-out rejected

The cost of credit protection on US and European car manufacturers rocketed in early European trading today following the US Senate's rejection of a $14 billion rescue package for the US auto industry.

US manufacturers Ford and General Motors (GM) were trading up front today, meaning a buyer of protection on either company would have to pay 500 basis points in addition to a large percentage of the contract up front - 70.5% and 78.75% respectively, according to CMA Datavision.

In Europe, spreads on Porsche and Renault widened over 100bp from 718.8bp to 862.5bp and from 459.4bp to 561.7bp, respectively, at 10:30am GMT today, which were rises of 143.7bp and 102.4bp.

CDSs referencing BMW widened 88

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