October 11, 2016 / 9:06 AM / 2 years ago

South Africa CDS hit 3-mth high as finmin Gordhan issued with summons

LONDON, Oct 11 (Reuters) - The cost of insuring exposure to South African debt leapt to three-month highs on Tuesday and dollar bond prices fell after respected finance minister Pravin Gordhan was issued a formal summons to appear in court.

Gordhan is highly respected by financial markets, but is being investigated in relation to the establishment of a special tax unit a decade ago He has described the allegations as “political mischief”.

Data from Markit showed that five-year credit default swaps (CDS) for South Africa rose more than 13 basis points (bps) on the day to 264.6 bps, the highest since July 11.

South African dollar bonds also fell across the curve by as much as 2.2 cents, according to Tradeweb, to the lowest since end-June.

Reporting by Karin Strohecker and Claire Milhench

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