Credit Isn't Looking Pretty

CDS on Berkshire (BRK.A), the Warren Buffett AAA-rated company traded at 388bp.

The spread on the top, “AAA” rated CMBX-5 rose to a record 540 basis points, more than five times the level in May.

Masonite, a KKR- (KFN) owned Canadian company, bought some time to restructure its debt, but too late, the LCDS (loan-only CDS) are triggered because of a missed interest payment.

Meanwhile the 30 year swap spread is a record negative 28bp, this was once thought to be a “mathematical impossibility”.