HALISTER1: Malaysia CDS Fair Value Seen 125 After Rise to 163 on 1MDB: ING

Malaysia CDS Fair Value Seen 125 After Rise to 163 on 1MDB: ING

(Bloomberg) -- Five-year credit-default swaps on Malaysian sovereign debt spiked in the past few days after an Abu Dhabi sovereign fund said 1MDB was in default of its obligations, ING Groep’s Asia research head Tim Condon writes in note.
  • “Malaysian CDS was one of the financial assets that re- priced too much in 2015, in our view,” says Singapore-based Condon
  • Five-yr CDS climbed 17 bps in past three days to 163, the highest this mo.: CMA prices. They rose to 247 in Sept., the highest in more than 6 yrs, amid a slump in the ringgit
  • Bloomberg model suggests swaps should be nearer to 71
  • NOTE: Malaysia’s 1MDB at Risk of Default as Partner Ends Bond Support
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Timothy Condon (ING Groep NV)

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