Fitch says analysts can use CDS prices to come up with market default risk estimates.

Fitch Ratings say players in the credit default swap (CDS) market are acting as if they are cooler toward a major issuer of long-term care insurance (LTCI).

Fitch says the CDS market is now acting as if the players think Genworth Financial Inc. (NYSE:GNW) should have a credit rating of BB plus, down from BBB minus earlier in the year.

The CDS market gives participants the ability to make investments tied to the likelihood that a credit user will or will not default on its obligations. CDS market players assume a strong issuer will pay an interest rate close to the rate the U.S. government would pay, and that the spread between the issuer’s rate and the comparable Treasury rate will be wider for a weaker issuer.

Fitch says it can use spread data from a CDS pricing service it sells to estimate what credit rating the CDS market would give an issuer.

The CDS market cut Genworth’s implied rating after Genworth announced second-quarter earnings that were somewhat lower than analysts had expected and said it was reviewing the adequacy of LTCI claim reserves.

A traditional Fitch credit rating unit has given Genworth’s insurance companies A-minus insurance financial strength ratings.