Decoupling default and spread risk
Constant maturity credit default swaps are starting to be marketed in the region, although investors have so far been slow to take up the product. Mia Trinephi reports
A handful of dealers have begun marketing constant maturity credit default swaps (CMCDS) in Asia. The product, which periodically resets premiums to reflect current market spread levels, effectively decouples spread and default risk, and is being touted as a means of enticing those investors who think that CDS spreads are too tight into the market.
The product has been marketed in the US and
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