(Bloomberg) ? The cost to insure debt payments from Bawag PSK Bank almost doubled last week after Refco Inc.?s bankruptcy judge placed a freeze on the Austrian lender?s US assets.

Judge Robert Drain made the temporary restraining order after Refco creditors demanded that Bawag be forced to return $1.3 billion transferred in August 2004 by former Refco chief executive officer Phillip Bennett. Refco creditors accuse Bawag of aiding fraud that drove the futures broker to bankruptcy.

Bawag?s debt insurance costs are higher than any other European bank?s, according to credit-default swap prices on Bloomberg. Austria?s central bank this week said it?s preparing for a possible surge in withdrawals at Bawag.

?There are fears that deposit withdrawals in Austria will accelerate on the back of the news,? said Simon Adamson, an analyst at research company CreditSights Inc. in London. People are asking ?whether there are further skeletons in the closet,? he said in a report.

The annual cost to insure 10 million euros ($12.5 million) of Bawag debt for five-years using credit-default swaps jumped 28,000 euros, or 28 basis points, to 61,000 euros, according to data compiled by Bloomberg. The increase was the biggest of any company in Europe this week.

In a credit-default swap, the buyer pays an annual premium to guard against a borrower failing to pay its debts. In the event of a default, the buyer gets paid the full amount insured and hands over defaulted loans or bonds to the swap seller. Swap prices typically decline when creditworthiness improves, and rise when it worsens.

Austria?s central bank last week said it will step in to provide emergency funds if there is a surge in withdrawals. Bawag chief executive officer Ewald Nowotny said on Austrian television at the weekend that he?s seeking a settlement with creditors to avoid uncertainty as Morgan Stanley prepares a sale of the bank. ?Lawsuits and counter lawsuits are pretty normal in a highly litigious country like the US,? said Luis Antonio Maglanoc, a credit analyst at Munich-based HVB Group. ?Support would be forthcoming to Bawag if necessary.?

HVB kept a ?market weight? recommendation on Bawag?s bonds, meaning investors should hold the same amount as recommended by the indexes they follow.

Bawag has about 14 billion euros of bonds outstanding, according to data compiled by Bloomberg.

Danish telephone company TDC A/S was Europe?s best- performing credit-default swap this week. Nordic Telephone Co., created by buyers of Copenhagen-based TDC, completed a sale of junk bonds at a cheaper cost than analysts expected, said Marcus Schueler, head of integrated credit marketing at Deutsche Bank AG in London.

The average price for credit-default swaps on the 125 investment-grade companies included in Europe?s ITraxx Series 5 index fell to a record 27.5 basis points from 29.50 basis points the same time a week ago, according to prices on Bloomberg.

The equivalent Dow Jones CDX North American Investment Grade Index fell to a record 34.5 basis points today, according to Deutsche Bank AG prices, from about 38 basis points a week ago. The cost to protect bonds of 45 European companies with the highest junk ratings or lowest investment-grade rankings included in the ITraxx Crossover Index Series 5 also fell to a record, at 228 basis points, from 249 a week ago.