The bond risk of nuclear power companies had the largest weekly increase in seven months led by Kansai Electric Power Co., the utility likely to face the biggest electricity shortage this summer, after the country shut its last reactor.
The cost to insure the debt sold by Kansai Electric climbed 49 basis points last week to 286 basis points Thursday, on track for the biggest seven-day jump since Oct. 14, CMA prices show. That's more than double the 19 basis point gain for Markit iTraxx Japan index of default swaps and tenfold the advance for North American companies in the period, according to the data.
Japan, without atomic power for the first time since May 1970, is relying on imported oil and liquefied natural gas to avoid electricity shortages, leaving utilities vulnerable to rising prices and supply interruptions. Moody's Investors Service last week cited the impact of shutdowns on profitability when it cut ratings by two levels on Kansai and five other nuclear operators.
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