Tag Archives:

CDS (credit default swaps)

Never a dull moment – trying to make sense of last week

Political turmoil in Italy and Spain, escalating trade tensions and, for good measure, unexpectedly strong US employment data – to say that markets had a turbulent few days would be an understatement. Taking a step back, here are three lessons I took away from last week.

(1) Market sentiment shifts can be brutal

Political risks in the European periphery are real – a statement that might sound t…

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How to find relative value in EUR and USD investment grade credit using CDS

There is more than one way to skin a cat for credit investors. Those looking for credit exposure can do so through either owning the debt issued by an issuer or by selling credit default swap (CDS) protection for the same issuer. The differential in price between the corporate bond and CDS contract can mean the difference between outperforming and underperforming in a world of tight credit spre…

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Bradford & Bingley skip bond coupons – is this legal?

We’ve had a question from a reader of this blog about yesterday’s announcement that Bradford & Bingley will be skipping coupon payments on some of its bonds and whether this constitutes an event of default.

Actually it doesn’t, and why not?  Well, because HMT says so…

Back in February the government made changes to the terms of its nationalisation of B&B, using power it gave itself under the ne…

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