(BP 33.00, +0.22, +0.67%) credit-default swaps ballooned on Thursday to junk level status, despite the oil giant being rated AA by rating agencies. According to data from Markit, BP swaps widened to 570 basis points, up 195 points from Wednesday. That means it costs $570,000 per year to insure $10 million of BP debt for 5 years.
asr: so $10 mil $500k that is 5% it costs to insure DEBT per year that is junk status .
- it means if any existing BP Lender ( who lended money already to BP ) can buy insurance of this 5% so they get paid full from insurarer in case of if BP defaults
