Recent defaults lead to record credit derivatives payouts

CDS auctions have yielded historically low recovery rates this year, meaning swap sellers have had to pay more than normal

Covid 19 has put pressure on distressed companies
Fallout from the coronavirus pandemic has heaped pressure on already distressed firms

Auctions to settle credit default swaps this year have led to the lowest average recovery rates since records began in 2005, as Covid-19 bears down on distressed companies and leaves swap sellers on the hook for larger payouts.

The recovery rate, decided by the auction, reflects the expected value of a company’s cheapest-to-deliver bonds, making the CDS payout the difference between that price and the par value of 100. In other words, the lower the recovery rate, the higher the payout on the

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 or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options


Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a 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