Cost of insuring Saudi debt rises on diplomatic crisis

Insurance costs on Saudi Arabian debt rose on Wednesday to the highest level since January as the diplomatic crisis in the Gulf region continued, Reuters reported Wednesday.

Data from IHS Markit showed that five-year credit default swaps (CDS) for Saudi Arabia gained three basis points (bps) from Tuesday's close to 114 bps, the highest level since mid-January, the report said.

Meanwhile, exposure to Qatari debt also became more expensive as insurance costs rose while its 2026 sovereign dollar bond slipped to a five-and-a-half month low.

Saudi Arabia, the United Arab Emirates, Bahrain, and Egypt severed ties early this month with Qatar, accusing the Gulf state of supporting terrorism. The nations cut land, sea, and air links with Qatar and expelled the gas-rich state from a Saudi-led coalition currently fighting in Yemen.

Qatar's 2026 sovereign dollar eurobond fell 0.2 cents in the dollar to 97.257 cents, the lowest level since early January, according to Tradeweb data, Reuters said.

Qatar five-year CDS were trading at 118 bps, up 3 bps from Tuesday's close according to IHS Markit, and just below the 119 bps hit on Monday, which was the highest since February 2016.