That means it costs an annual 360,000 euros to insure 10 million euros of Fiat debt against default.
Meanwhile, the value of GM debt rose as investors applauded the auto maker's bravery in refusing to negotiate a settlement over the option.
General Motors' 8.375 percent euro bond due in July 2033 traded five basis points tighter bid at 387 basis points over Bunds.
Fiat and GM have been locked in talks over an agreement for Fiat to sell its auto unit to GM.
The world's largest auto maker had been expected to pay Fiat 1.5-2 billion euros to buy its way out of the contract, which may now be referred to the courts.
"The concern over Fiat is not when they will get the money but if," said a trader in London.
"In the end GM will probably write a cheque but meanwhile they are keeping their cash and making Fiat sweat."
Elsewhere, bonds of European companies rose in value as a fresh wave of structured finance hit the market, fuelling demand for collateral cash bonds, traders said. Industrial sector credits were most in demand as banks looked to hedge sales of synthetic Collateralised debt obligations.
CDOs parcel together exposure to a basket of debt via the credit derivatives, bond or loan markets. In synthetic CDO deals, investors sell credit default swaps (CDS) to the banks arranging the CDOs, lowering the cost of insuring against default.
In turn, the banks buy cash bonds or sell protection to balance their books, pushing spreads tighter.
The FTSE Euro Corporate Bond Index showed investment-grade corporate bonds in euros yielding an average 44.5 basis points more than similarly dated government bonds at 1513 GMT, 0.1 basis points higher than the record tight level.
Elsewhere, US based Tower Automotive Inc, a large supplier of truck frames that has been struggling with a cash shortage, on Wednesday filed for bankruptcy protection from creditors, after failing to pay interest due on its euro-denominated bonds.
The Chapter 11 filing covers about two dozen affiliates. Earlier on Wednesday, bondholders and traders in London said Tower failed to make an interest payment due on its euro-dominated bonds.