Bonds of Credit Suisse Group tumbled on Wednesday (Mar 15) trading to levels typically associated with distress.

The bank’s 6.373 per cent debt due 2026 dropped 19.75 US cents to 68 US cents on the dollar as of 9.18 am in New York, for a spread of about 2,000 basis points, according to Trace. Its 9.016 per cent coupon debt due November 2033 plummeted nearly 31 US cents to 65 US cents on the dollar.

Several other Credit Suisse bonds plunged by more than 10 US cents on the dollar on Wednesday, leading declines in New York credit trading, with spreads flaring above 1,000 basis points across the maturity curve.

Bonds trading with a spread of more than 1,000 basis points over government debt are viewed as distressed by credit markets. The cost of insuring Credit Suisse debt against default in the near-term earlier hit a level that signalled serious investor concerns.

A key measure of credit risk, the investment grade CDX, eroded the prior day’s gains. The index, which rises with increased credit risk, gained about eight basis points to trade at about 93.1 basis points as of 9.18 am New York time, the highest since the start of November. BLOOMBERG