In its latest quarterly global sovereign credit risk report, CMA said Romania slid five notches to 21st in the top of the riskiest economies that could default on their debt in the next five years.
Credit-default swaps (CDS) to insure Romanian sovereign debt against default have dropped to 314.2 basis points in the first three months of 2012, from around 445 basis points in December last year.
However, the spreads remains wider than the 212 basis points level recorded in April 2011, when Romania paid the lowest interest rates on its sovereign debt, CMA told Mediafax in an email.
Romania’s cumulative default probability index decreased to 20% at the end of March, from 27% in December 2011, the report noted.
Cyprus leads the top ten most risky sovereign credit chart, with a five-year mid par CDS of 1159.1 basis points. The country replaced Greece as the world’s economy most probable to enter default in the medium term, after the latter finally initiated a debt-restructuring program (which is perceived as a default).
Portugal, with spreads closing at 1135.8 basis points, is the second most risky debtor worldwide, followed by Pakistan (829.6 bps) and Argentina (812.1 bps).
Hungary ranks tenth in the top of most risky countries to enter default, with 544.3 bps, while Spain and Italy follow suit with spreads of 431 bps and 390 bps, respectively.
At the opposite end, Norway is the less risky economy to default on its own debt, with a CDS of 22.5 bps, followed by the US (30 bps) and Switzerland (41.1 bps).