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
The week on Risk.net, July 7-13, 2018Receive this by email