German CDS switch creates credit-linked note mismatch

Note issuers fear losses after relabelling of swap contracts creates subordination discrepancy

German-CLN-mismatch
Risk.net montage

Issuers of credit-linked notes referencing German banks face a possible dislocation in contracts used to hedge the products, after an industry-wide protocol transferred swathes of senior credit default swaps (CDSs) on those entities to a more junior transaction type.

On the face of it, the International Swaps and Derivatives Association’s German Bank CDS protocol, which resulted in 344 firms switching senior German bank CDS to the senior non-preferred transaction type, was little more than a

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: