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Which Key States Are Most Likely to Default?

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STATE AND MUNICIPAL WOES
DailyFeed
The third quarter Global Sovereign Credit Risk Report, released by CMA, includes a special report on key U.S. states. You may remember in August we looked at U.S. state 5-year CDS prices. How is this different?

What CMA does is quantify the cumulative probability of default (CPD) over a five-year period using both an industry standard model and their own propietary data. The charts below show the overall trend in credit spreads for the states CMA tracks and the CPD ranked in order from riskiest to least risky. Not surprisingly, California and Illinois rank as the two riskiest state economies.




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