Credit Default Swap (CDS) Spread
A CDS spread is the annual cost, in basis points, of insuring against a borrower defaulting on its debt.
What is Credit Default Swap (CDS) Spread?
A spread of 80 basis points means paying £80,000 a year to protect £10 million of debt. Spreads rise as default risk rises, so sovereign CDS spreads are often used to estimate country risk premiums.