Investors See Merrill 10 Times More Likely to Fail

MoneyNews - Investors See Merrill 10 Times More Likely to Fail

Investors now pay 10 times more money to ward off the risk of a Merrill Lynch default, according to a new Bloomberg News analysis.

The data comes just as Merrill Lynch announced it would take a big new write-down totaling $5.7 billion and issue $8.5 billion in new stock.

The Bloomberg analysis shows the cost of insuring the banking giant's bonds against default using credit derivatives is 10 times higher than a year ago. The analysis tracks the cost of guaranteeing against nonpayment for debt as short as six months and up to 10 years.