Greek, Portuguese CDS, bond yield spreads drop

The cost of protecting government debt against default in Greece and Portugal fell on Friday as hopes an aid deal would be secured in coming days grew.

Five-year credit default swaps (CDS) on Greek government debt fell to 622 basis points from 670 bps at the New York close on Thursday, according to CDS monitor CMA DataVision.

It means the cost falls to 622,000 euros to protect 10 million euros-worth of Greek government bonds.

Five-year Portuguese CDS fell to 263 bps from 298 bps at the New York close on Thursday. Other peripheral CDS in the euro zone also eased.

The move came after 10-year Greek government bond yields versus euro zone benchmark German Bunds tightened. [ID:nLDE63T0DX]

The 10-year Portuguese/German government bond yield spread tightened to 245 bps from 285 bps at the European settlement close on Thursday