M&S CDS surge 25 bps wider on falling sales

LONDON (Reuters) - The cost of insuring retailer Marks & Spencer's debt against default in the credit derivatives market rose sharply on Wednesday after the company reported a 5.3 percent fall in first quarter underlying sales.

Chief Executive Stuart Rose said the statement was "effectively an earnings downgrade" and warned tough trading was set to continue.

Five-year credit default swaps on Marks & Spencer rose 25 basis points to 250 basis points, a credit trader said. The price means it costs 250,000 euros a year to insure 10 million euros of M&S debt against default. M&S shares were down 21.4 percent at 250 pence by 8:21 a.m.

The move also knocked credit default swaps on retailers Next, 10 basis points wider at 290, and Kingfisher, 5 basis points wider at 340, the trader said.

(Reporting by Richard Barley)