Bulgaria at Spot 20 in Most Risky Sovereign Credit Ranking

Bulgarian sovereign credit default swaps spreads widened less than the Greek and Romanian in the fourth quarter of last year, according to data from credit information specialist CMA.

This has sent Bulgaria in the twentieth position in the most risky sovereign credit ranking, which includes 68 countries.

Greece, Slovenia and Egypt had the worst-performing sovereign credit during the fourth quarter of 2011. Greece's credit default swap (CDS) spreads widened almost 57% in the last three months of 2011.

"A restructuring and write-off of Greek debt remains an almost certain event," says CMA. "However, the debate continues as to whether a default will be triggered or whether the debt swap plan will be accepted by bondholders."

Romania ranked sixteenth.

Nearly all global CDS prices widened during November's volatile period as the Eurozone debt crisis continued, with the region widening 9% overall, indicating the significance of Western Europe to the global economy and the importance of a finding a permanent resolution to the situation.

Following political turmoil that Egypt has been experiencing in recent months, the country entered the "Top 10 Most Risky Sovereign Credit" table in eighth position, as the spreads widened from 457bp to 621bp.

CDS for the USA was also affected during November's events, dipping below 40bp mid-quarter but widened back out with the rest of the market, closing the year below 50bp, 3bp tighter on the quarter.

At the other end of the spectrum, Asian sovereigns had the best quarter - Indonesia (down 30%), Malaysia (down 27.3%) and South Korea (down 26.2%) all became less risky in the eyes of the CDS market over the quarter.

Those considered at least risk of default, according to CMA data, are Norway (3.9%), the US (4.3%) and Switzerland (5.9%).

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