Sept. 22 (Bloomberg) -- The cost of insuring Europeancorporate debt surged to the highest in 2 1/2 years, accordingto prices for credit-default swaps. The Markit iTraxx Crossover Index of swaps on 50 companieswith mostly high-yield credit ratings rose 43.5 basis points to848.5, according to JPMorgan Chase & Co. at 8 a.m. in London,the highest since April 2009. The Markit iTraxx Europe Index of 125 companies withinvestment-grade ratings jumped 12.25 basis points to 199.25,the highest since March 2009. Bank bond risk also soared, with the Markit iTraxxFinancial Index of swaps on the senior debt of 25 lenders andinsurers climbing 19.5 basis points to 308.5, the highest sinceSept. 12 based on generic prices. The subordinated-note gaugerose 33 basis points to 535, the highest since Sept. 13. A basis point on a credit-default swap protecting 10million euros ($13.6 million) of debt from default for fiveyears is equivalent to 1,000 euros a year. Swaps pay the buyerface value in exchange for the underlying securities or the cashequivalent should a borrower fail to adhere to its debt agreements.
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