CDS buyers should beware demergers, warns Fitch

Investors in credit default swaps could find their holdings unexpectedly affected by corporate spin-offs and demergers, rating agency Fitch has warned.

In a report published this week, Fitch analysts Roger Merritt, James Batterman and Tim Greening warn that the CDS market is not a perfect substitute for the loan and bond markets.

In particular, in the event of a spin-off, loan and bondholders could find themselves benefiting from early retirement or protection agreements. CDS, however, would

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 indvidual account here: