Scotland secession unlikely to split UK CDSs, analysts say
A 'yes' vote in the referendum could result in outstanding UK CDSs being split in two, but analysts are not holding their breath
Holders of credit default swap (CDS) protection on the UK have a slim chance of getting something for nothing this September, when Scotland holds a referendum on independence. If voters decide to go it alone, credit strategists say it would probably be deemed a CDS succession event – which could see outstanding contracts split in two, giving market participants additional protection on what would probably be a riskier credit. Uncertainty around the outcome could also drive spreads wider as the
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