A credit default swap (CDS) is a financial swap agreement that the seller of the CDS will compensate the buyer (usually the creditor of the reference loan) in the event of a loan default (by the debtor) or other credit event. This is to say that the seller of the CDS insures the buyer against some reference loan defaulting.
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 loan defaults. It was invented by Blythe Masters from JP Morgan in 1994.
In the event of default the buyer of the CDS receives compensation (usually the face value of the loan), and the seller of the CDS takes possession of the defaulted loan. However, anyone can purchase a CDS, even buyers who do not hold the loan instrument and who have no direct insurable interest in the loan (these are called "naked" CDSs). If there are more CDS contracts outstanding than bonds in existence, a protocol exists to hold a credit event auction; the payment received is usually substantially less than the face value of the loan.
Premium on the credit default swap (CDS), which gauges sovereign credit risk on the country's five-year government bonds, averaged 21 basis points in April, down 1 basis point from the previous month ... Enditem. .
He stated. ... In 2020 the total value of derivatives trades was $600 trillion.(9) There are a wide variety of derivatives, some of them incredibly complex, with names such as futures, options or swaps. This includes some of the investments that were at the heart of the frauds committed during the financial crisis, such as CreditDefault Swaps (CDSs) ... *.
Korea's credit default swap (CDS) premium, an indicator that shows the country's risk of national bankruptcy, hit its lowest level since the global financial crisis in 2008, advancing the prospect of a faster economic recovery amid the COVID-19 pandemic, the finance ministry said Thursday ... The lower the premium, the lower the risk of default.
The spread on credit default swaps (CDSs) for South Korea's 5-year dollar-denominated currency stabilization bonds came in at 19 basis points Wednesday, according to the Ministry of Economy and Finance... The spread on CDSs reflects the cost of hedging credit risks on corporate or sovereign debt.
Premium on credit default swap (CDS), which gauges credit risk on the five-year government bond of South Korea, declined to 19 basis points in New York overnight ... Lee said South Korea's sovereign credit risk has been on the decline since April, noting that it reflected how foreign investors see the Asian economy.
In the last decade, significant strides have been made to grant micro, small and medium enterprises (MSMEs) access to credit, but more remains to be done ... It has been almost two decades in the making, and everything from credit default swaps to interest derivatives were thrown in to achieve it, but with limited impact ... MSME credit gap.
He has since repeated the trick, though with fewer autobiographical elements, with an impressive range of subjects, from statistical analysis in baseball ( Moneyball ) to the credit default swap market and the 2008 financial crisis ( The Big Short ) ...It’s a little grandiose, but it’s an accurate enough elevator pitch ... ....
... default, as well as increased susceptibility to adverse economic developments ... In addition, the Fund may invest in other asset classes and investments such as, among others, REITs, credit default swaps, short sales, derivatives and smaller companies which include additional risks.
The tax bill was intended to raise revenue to defend Colombia’s investment-grade credit rating and address a surge in poverty caused by the pandemic by funding social programs and providing cash transfers for its neediest citizens ...The country’s five-year credit default swap jumped to the highest in a month. Another Blow ... Street Protests ... .
The cost to insure against a potential default by Indian banks has risen about a fifth in the past two weeks as various states imposed local curbs on mobility and businesses. CreditDefault Swaps (CDS), an insurance against default, tied to ICICI Bank... If the issuer defaults, the investor’s loss would be covered.
As R. R ... As a testament to the company's exemplary recent operating performance, we note that the CDS (credit default swaps) spread has tightened meaningfully, from roughly 1,620bps in May 2020 to 475bps currently. Importantly, that spread tightening move to sub-500bps is technically significant as the credit shifts from "points upfront" to "spread."
CDS costs rise to first Covid wave levels… The cost to insure against a potential default by Indian banks has risen about a fifth in the past two weeks as various states imposed local curbs on mobility and businesses. Credit default swaps, an insurance against default, tied to ICICI Bank.
Credit markets are sounding warnings for other asset classes amid India’s unprecedented surge in Covid-19 cases ... Credit ... Credit-default swaps for State Bank of India -- considered a proxy for India’s default risk -- widened to a 9-month high this week, before dropping back Tuesday after the news about the US vaccine assistance, CMA data show.
Credit markets are sounding warnings for other asset classes amid India’s unprecedented surge in Covid-19 cases ... Credit ... Credit-default swaps for State Bank of India -- considered a proxy for India’s default risk -- widened to a 9-month high this week, before dropping back Tuesday after the news about the U.S.