New CDS Counterparty Hedge Arrives
By Kathleen Hoffelder
Published December 17 2011 International Financing Review
A new product to offset counterparty risk could be launched as early as January. Single-name contingent credit default swaps, which base their notional amount on a reference entity’s market value, have traded for years on a bespoke basis, but the product is now getting a facelift. Indexed contingent CDS are expected to begin trading in the first quarter of 2012 and could start as early as next month.
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