Wednesday, June 9, 2010

BP (NYSE:BP), Anadarko (NYSE:APC), Transocean (NYSE:RIG) Credit Default Swaps Costs Soar

Credit default swap (CDS) costs continue to rise for companies with potential and significant liability to the Gulf oil spill, including BP (NYSE:BP), Anadarko (NYSE:APC) and Transocean (NYSE:RIG).

What credit defaults are used for are to insure the debt of a commpany.

In the case of BP, their cost to insure their debt increased by 106 basis points to 368 basis points, which means it costs them $368,000 a year now to insure every $10 million they are in debt for, according to Markit Intraday.

For Anadarko, their credit default swap costs have risen even further, by 145 basis points, to 575 basis points, while Transocean's credit default swap rose by 70 points to also reach 575 basis points.

These three companies are probably the most at risk in the accident, with BP owning 65 percent of the oil well, Anadarko 25 percent, and Transocean being the company who had operational responsibility for the Deepwater Horizon oil rig.


Anonymous said...

I think you mean CREDITORS would pay $368K for every $10M in BP debt that they hold? Gotta love the internet....

Gary said...

Do you know who owns the other 10 percent of the well?