Portugal gaps wider on reports it is planning to copy Greek debt restructuring

European sovereigns have moved wider this morning, led by Portugal, which has blown out by over 200 basis points as fears grow that it will be next up to seek debt restructuring after Greece. Portugal’s five-year CDS spread has gapped out by 212bp to 1,468bp according to data from Markit.

Reuters has reported this morning that Portuguese officials have been sounding out advisors on replicating aspects of the final debt restructuring deal for Greece. Some Portuguese government officials are believed to be in favour of implementing a debt restructuring arrangement quickly, in the belief that the long drawn-out Greek debt talks have made the situation worse.

Most sovereigns have moved wider this morning, but only by narrow margins, with Italy and Ireland being the biggest movers after Portugal. Italy’s five-year CDS spread has widened by 12bp to 395bp and Ireland going out by 8bp to 585bp.