C&P from bloomberg.com concerning the cost of insuring debt bonds.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aeW1nFsNgJpU&refer=home
Credit-Default Swaps
The cost to protect $10 million of debt for five years backed by
MBIA's insurance unit jumped $25,000 to $775,000, according to broker
Phoenix Partners Group. Credit-default swap sellers are demanding
$815,000 to protect $10 million of debt guaranteed by the insurance
unit at Ambac, up from $765,000, according to London-based CMA
Datavision.
Credit-default swaps are financial instruments based on bonds and
loans that are used to speculate on a company's ability to repay debt.
They pay the buyer face value in exchange for the underlying
securities or the cash equivalent should a borrower fail to adhere to
its debt agreements. A rise indicates deterioration in the perception
of credit quality; a decline, the opposite.
