Puzzled by succession

Event risk

pg27-schuler-gif

Dealers and investors could once be relatively sure how credit default swap (CDS) spreads would behave if the underlying credit were the subject of a leveraged buy-out (LBO) or even just an LBO rumour. Most of the time, spreads would blow out on the expectation that the target credit would be leveraged to the hilt and subsequently downgraded, to the detriment of its bondholders.

That convention has now all but vanished, as corporate financiers have come up with a host of new strategies to hel

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: