Spanish CDS prices fall on aid deal for country

LONDON: The cost of insuring Spanish debt against default fell on Monday in a knee-jerk reaction to an agreement by euro zone finance ministers to lend Spain up to 100 billion euros ($125 billion) for its bank rescue fund. 

The move is aimed to shore up Spain's ailing banking sector but some analysts said the relief it brought would be short-lived.   

The cost of insuring 5-year Spanish debt against default fell 24 basis points to 560 bps, and the Italian equivalent followed suit. Five-year Italian CDS prices shed 17 bps to 519 bps.