In Brief
Insurance cost on gov’t debt retreats from record highs The cost of insuring Irish government debt against default fell yesterday after the government agreed to a recapitalization program, while the cost of Greek protection eased slightly from recent record highs. Five-year Irish credit default swaps narrowed to 188.3 basis points yesterday, from 196.1 basis points at Monday’s close, according to monitor CMA Datavision. That means it costs 188,300 euros to insure 10 million euros of the country’s debt against default. The Irish government said late on Monday it will invest up to 10 billion euros in a recapitalization of its financial institutions, aiming to ensure stability in the banking sector. The five-year Greek credit default swap meanwhile, narrowed to 241.6 basis points from 243.6 at Monday’s close, retreating further from last week’s high of 250 basis points it hit as the political situation in the country deteriorated. Greek government bond spreads continued to widen however, with the 10-year spread over German Bunds hitting 229 basis points, Reuters data showed. (Reuters) New 10 percent capital gains tax to be delayed until April Greece will delay the imposition of a 10 percent capital gains tax on stock trading to April 1, instead of in January, the Finance Ministry said yesterday. It said the delay was for technical reasons. Greece had decided in late August to levy a 10 percent tax on capital gains and dividends in 2009 as part of a package to boost budget revenues. (Reuters) Cyprus T-bills Cyprus sold 1.4 billion euros in 39-week treasury bills with a yield of 3.5 percent at Monday’s auction, the island’s Finance Ministry said yesterday, as it attempts to turn over its debt among tightening credit markets. «We are securing to a large degree the financing needs of the Republic for the next 10 to 12 months,» Finance Minister Charilaos Stavrakis told reporters. «The bills mature in October, so therefore it will not burden the (public debt) indicators at the end of the year.» The bills have a January 2, 2009, issue date and mature on October 2, 2009. They allow the ministry to refinance some 500 million euros in debt maturing in January, and another 500 million throughout the remainder of 2009, Stavrakis said. Stavrakis said the December 15 auction was 2.5 times oversubscribed. (Reuters) Turkish lending Turkey’s government plans to get $1 billion in lending from foreign institutions to help small and medium-sized enterprises weather the global credit crunch, Treasury Undersecretary Ibrahim Canakci said. The government will also increase loans to businesses guaranteed by the treasury to $4 billion next year from $2 billion this year, Canakci told reporters in Ankara yesterday. Turkey got $600 million from foreign institutions to lend to companies this year, Canakci said. (Bloomberg) Infrastructure fund Abu Dhabi Commercial Bank PJSC, the United Arab Emirates’ third-biggest lender by way of assets, plans to raise as much as $1 billion for an infrastructure fund it has set up with Australia’s Macquarie Group Ltd. The ADCB Macquarie Infrastructure Fund has already raised $630 million from investors in the United Arab Emirates, Qatar, Kuwait and Korea in addition to investments by ADCB and Macquarie. (Bloomberg)
