Credit Derivative

In finance, a credit derivative refers to any one of "various instruments and techniques designed to separate and then transfer the credit risk" or the risk of an event of default of a corporate or sovereign borrower, transferring it to an entity other than the lender or debtholder.An unfunded credit derivative is one where credit protection is bought and sold between bilateral counterparties without the protection seller having to put up money upfront or at any given time during the life of the deal unless an event of default occurs. Usually these contracts are traded pursuant to an ISDA master agreement. Most credit derivatives of this sort are credit default swaps.
Posts about Credit Derivative
  • Bloomberg and UBS clash over Sef aggregation

    … that apes traditional phone-based trading. "Most clients tell us they get arguably better pricing by showing who they are to one of their liquidity providing partners than they would get in an anonymous interdealer market," said Nathan Jenner, chief operating officer for fixed-income electronic trading at Bloomberg. He added that of the average…

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