French bond spread at highest since 2012 as default insurance spikes

LONDON, Sept 18 (Reuters) — The cost of insuring French debt against the risk of default surged on Friday to its highest since April 2025 and bond yields rose sharply, as growing concern about the country's finances pushed the premium investors demand to lend to Paris to the most since 2012. French 5-year credit default swaps, a form of protection against the risk of default, hit 41.5 basis points, the most since the "Liberation Day" turmoil unleashed by U.S. President Donald Trump's blanket tariffs in April last year. At the same time, the premium the French government pays to borrow over 10 years relative to the German one rose over 100 basis points for the first time since the euro zone debt crisis in 2012, reflecting the extra compensation investors demand to buy French debt. France's bonds have been among the worst hit in the rout that has hit global bond markets in the past few weeks. On Friday, yields on benchmark-10 year French bonds rose 10 basis points to 4.456%, making them by far the worst-performing market. France's credit default swaps were around 2.9 bps higher than Thursday's close, making this their biggest one-day increase since mid-March, when the war whipped up