WaMu's CDS spreads surge to record high-Phoenix

NEW YORK, Sept 10 (Reuters) - The cost of protecting Washington Mutual's (WM.N: ) debt with credit default swaps surged to a record high on Wednesday as the lender's shares plunged more than 25 percent.

Five-year credit default swaps on Washington Mutual traded at 40 percent upfront, plus 500 basis points annually, up from 32 percent upfront plus 500 basis points a year on Tuesday, according to data from Phoenix Partners Group. That means it now costs $4 million on an upfront basis plus $500,000 a year to protect $10 million of debt for five years. (Reporting by Dena Aubin; Editing by Tom Hals)