Philippines Vs Indonesia CDS: Gap Closing?

One of our key emerging market CDS spread compression plays over the past eight months has been the Philippine 5-year CDS over its Indonesian counterpart. The spread between the two narrowed to -5bps on Monday, as Philippines traded at 140bps and Indonesia at 155bps, but widened to 15bps as the Indonesian rallied to 142bps (amid reports of a possible Moody's upgrade) and the Philippines rose to 157bps.

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