(Bloomberg) -- The cost of insuring UBS Group AG’s debt against default soared in Sunday trading after the lender agreed to buy Credit Suisse Group AG.
UBS’s credit default swaps, derivatives often used to gauge a borrower’s credit risk, widened by at least 40 basis points to 215 bps for five-year contracts, according to people with knowledge of the matter. They asked not to be named as the information is private.
UBS agreed to buy its rival for more than $2 billion, according to people with knowledge of the matter.
The plan was put together quickly after Credit Suisse’s stock and bonds plunged in the aftermath of the collapse of a number of smaller US lenders. A liquidity backstop by the Swiss central bank to Credit Suisse failed to halt the turmoil.
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