CDSs tighten on US banks and energy companies
The cost of credit protection on US banks and energy firms plummeted in intraday trading, while confidence in the Japanese electronics sector continued to decline.
Five-year senior credit default swap (CDS) spreads referencing Merrill Lynch tightened to 207.1 basis points at 3:30pm London time from 231.9bp at the close of trading on Thursday. CDSs on Merrill's parent company Bank of America tightened to 185bp from 201.6bp, despite rating agency Fitch Ratings downgrading the bank's preferred stock to below investment grade status.
Former investment bank
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