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A credit default swap (CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer in the event of a debt default (by the debtor) or other credit event. [1] That is, the seller of the CDS insures the buyer against some reference asset defaulting.
A credit default swap is a financial swap agreement that the seller of the CDS will compensate the buyer (the creditor of the reference loan) in the event of a loan default (by the debtor) or other credit event. The buyer of the CDS makes a series of payments (the CDS "fee" or "spread") to the seller and, in exchange, receives a payoff if the ...
The events triggering a credit derivative are defined in a bilateral swap confirmation which is a transactional document that typically refers to an International Swaps and Derivatives Association (ISDA) master agreement previously executed between the two swap counterparties. The ISDA is a global trade organization for OTC derivatives, and ...
Credit default swaps are a portfolio management tool that gained notoriety during the peak of the 2008 financial crisis. These derivative investments are bit more complex than stocks, mutual funds ...
A daily look at legal news and the business of law: More Fallout from Exploding CDSs: Citigroup Sues Morgan Stanley The big banks generally don't sue each other, but that's changing thanks to ...
Through the use of a credit default swap, the bank receives some recompense if the reference credit defaults. There are several different types of securitized product, which have a credit dimension. Credit-linked notes (CLN): Credit-linked note is a generic name related to any bond whose value is linked to the performance of a reference asset ...
Spreads on U.S. one-year credit default swaps (CDS) - market-based gauges of the risk of a default - widened to 49 basis points on Thursday, according to S&P Global Market Intelligence data, the ...
A credit default swap index is a credit derivative used to hedge credit risk or to take a position on a basket of credit entities. Unlike a credit default swap, which is an over the counter credit derivative, a credit default swap index is a completely standardized credit security and may therefore be more liquid and trade at a smaller bid–offer spread.