The concern follows a controversy this week over Britain's Rentokil , where it was discovered that the company's default swaps did not cover new debt issued by a distinct entity.
The cost of insuring against a default by Pilkington swung between 55 and 67 basis points on Thursday morning.
"The question of deliverables is a hot issue at the moment. People are spooked by Rentokil, and there's a lot of other names in the frame as well," said Rick Mattila, credit analyst at Dresdner Kleinwort Wasserstein.
The question hinges on whether Pilkington will provide a guarantee for debt financing following its takeover by Nippon Sheet Glass . If there is no guarantee, and with just one 2008 bond outstanding, the cost of default insurance will fall because of the slim chance of a default on the single short-dated bond.
"There is also a fear that Pilkington may buy back its euro bond," said an analyst in London.
A spokesman for NSG said the company had not yet made a decision on a buyback.
On Wednesday, credit default protection on British services group Rentokil Initial fell sharply as investors realised a 10-year sterling note would be sold out of a new company formed last year, cutting the value of existing insurance.
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