PARIS (MNI) – Ireland’s sovereign debt has been under pressure all
morning on news that a major clearing house sharply raised required
margins on Irish bonds.
LCH.Clearnet Ltd said it was raising the margin required for
positions in Irish bonds by 15% of net exposure. The additional margin
will be charged at close of business Thursday and reflected in the
margin call on Friday, the clearer said.
Irish sovereigns, already hard hit in recent days by renewed
investor worries about the sustainability of Ireland’s fiscal situation,
came under additional selling pressure, which pushed spreads on 10-year
Irish paper to a euro-era record high of +570 basis points against the
benchmark German Bund. That’s 17 basis points above Tuesday’s close.
Since October 18, Irish 10-year spreads have widened by more than 200
basis points.
Clearnet said it “will continue to monitor the situation closely
and keep the parameters under close review.”
It said that members affected by the changes would be contacted
later today and informed of the size of their margin call.
–Paris Newsroom, +331-42-71-55-40; bwolfson@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$,MT$$$$]