
	Where results make sense

Topic: Credit derivative

Related Topics

Credit default swap

Total return swap

Hedging

Derivatives market

Futures contract

Equity derivative

Corporate finance

Annuity

BBA LIBOR

Bear market

Hedge fund

Short selling

Ownership equity

Investment bank

JPMorgan Chase

In the News (Thu 12 Nov 09)

Northern Trust

Marvin Harrison

Peter Chernin

Gary Locke

Match Play

Penelope Cruz

Mickey Rourke

AR Rahman

Danny Boyle

Hugh Jackman

	Credit derivative - Wikipedia, the free encyclopedia
		A credit derivative is a contract (derivative) to transfer the risk of the total return on a credit asset falling below an agreed level, without transfer of the underlying asset.
		There is also a generally accepted principle that, where derivatives are being used as a hedge against underlying assets or liabilities, accounting adjustments are required to ensure that the gain/loss on the hedged instrument is recognised in the income statement on a similar basis as the underlying assets and liabilities.
		The pricing method is approximate in that it ignores the credit risk of the CDS seller, who may be unable to buy the bond in the event of default (suppose in an extreme case that the seller is also the issuer of the bond which is protected).
	en.wikipedia.org /wiki/Credit_derivative (3398 words)

	Credit Risk
		Credit ratings are vital to the credit industry because they offer consistent and publicly available credit scores, produced by independent agencies, for either the creditworthiness of a major entity or for a particular debt security or other financial obligation.
		Credit risk exposure measurement is especially important for lenders that extend lines of credit, as opposed to outright loans, and also to banks with portfolios of derivatives that have ever-changing and volatile credit exposures.
		The first credit derivatives were traded in the early 1990s, but it is only in the last couple of years that their appeal has expanded from a few leading banks, dealing among themselves, to encompass broader sections of the financial markets and a wider range of uses.
	www.erisk.com /Learning/JigSaw/CreditRisk.asp (7251 words)

	Credit Derivative
		A credit derivative is an OTC derivative designed to transfer credit risk from one party to another.
		Credit events are typically defined to include a material default, bankruptcy or debt restructuring for a specified reference asset.
		Most credit derivatives entail two sources of credit exposure: one from the reference asset and the other from possible default by the counterparty to the transaction.
	www.riskglossary.com /articles/credit_derivative.htm (489 words)

	credit derivative
		Credit derivative products can take forms, such as credit default credit limited notes and total return Derivative: the financial contract whose value is from the performance of assets, rates, currency exchange rates, or Derivative transactions include the wide assortment of financial contracts structured debt obligations deposits, swaps, futures, caps, floors, collars, forwards and various thereof.
		other of derivatives were to gain an economic to the underlying security in situations direct ownership of underlying was too costly or was prohibited by legal or restrictions, or to create a synthetic position.
		One should keep in that one purpose of derivatives was as a form of to move risk from someone cannot afford a major loss to who could absorb the free loss, or is able hedge against the risk by some other derivative.
	www.cleog.com /creditderivative.htm (1824 words)

	Credit Derivatives (Site not responding. Last check: 2007-11-04)
		Credit derivatives are privately negotiated bilateral contracts that allow users to manage their exposure to credit risk.
		Credit derivatives allow users to isolate, price and trade firm-specific credit risk by unbundling a debt instrument or a basket of instruments into its component parts and transferring each risk to those best suited or most interested in managing it.
		Credit derivatives pose problems both in terms of risk categorization as well as in netting of credit derivatives exposures against underlying loan portfolio exposures.
	pages.stern.nyu.edu /~sjournal/articles_00/credit_derivatives.htm (6676 words)

	ABASA: CREDIT DERIVATIVES FOR BEGINNERS: How Credit Derivatives are Being Used
		Credits concentrated in one particular industry or a particular location would be an example of the latter kind of concentration or correlation.
		Preemptive measures can be taken by structuring a credit derivative to provide down-grade protection, reducing the risk of forced sales at distressed prices and enabling a portfolio manager to own assets of marginal credit quality at lower risk.
		The use of credit derivatives to hedge dynamic exposure is a complex application beyond the scope of this introduction, but their use to hedge against future borrowing costs is relatively straightforward.
	www.aba.com /ABASA/abasa_creditderivatives3.htm (477 words)

	Derivative Instrument
		is a derivative because it derives its value from the value of a stock.
		One is the distinction between linear and non-linear derivatives.
		credit derivative A derivative instrument designed to transfer credit risk from one party to another.
	www.riskglossary.com /articles/derivative_instrument.htm (528 words)

	[No title]
		A credit derivative is a financial instrument used to mitigate or to assume specific forms of credit risk by hedgers and speculators.
		The credit spread is volatile in and of itself and it may be correlated with the level of interest rates.
		A credit default swap is a swap in which one counterparty receives a premium at pre-set intervals in consideration for guaranteeing to make a specific payment should a negative credit event take place.
	www.finpipe.com /crederiv.htm (1048 words)

	Credit Derivative news and developments
		The growth in the credit derivatives market surpasses all previous estimates - the first half 2005 data released by ISDA shows an unprecedented year-on-year growth and the volumes are moving towards a whopping USD 20 trillion by the year-end.
		May be he is quietly setting the tone to change his views on credit derivatives - the recent speech hailed credit derivatives as the most important banking development of the past decade but talked of risks.
		While the credit derivatives traders in the US are scheduled to return to the New York Fed by Feb 2006 on steps taken by them to resolve the problem on unconfirmed trades, the FSA UK's risk outlook for 2006 also mentions credit derivatives risks.
	www.credit-deriv.com /crenewsfeb04.htm (2295 words)

	ISDA CREDIT DERIVATIVES DEFINITIONS, SUPPLEMENTS AND COMMENTARIES
		The 2003 ISDA Credit Derivatives Definitions (the "2003 Definitions") are intended for use in confirmations of individual transactions governed by agreements such as the 2002 ISDA Master Agreement or the 1992 ISDA Master Agreements published by ISDA.
		The Master Credit Derivatives Confirmation (the "Master Confirmation") was published in July 2003 and is intended to be used for Japan, Australia, New Zealand, Asia and Singapore Transactions.
		The 1999 ISDA Credit Derivatives Definitions (the "1999 Definitions") are intended for use in confirmations of individual transactions governed by agreements such as the 1992 ISDA Master Agreements published by ISDA.
	www.isda.org /publications/isdacredit-deri-def-sup-comm.html (2403 words)

	CREDIT DERIVATIVES AND RISK MANAGEMENT
		Most of the credit derivatives literature is from the point of view of the investor, but what’s important to the investor is important to the issuer, because it affects the price that the investor will pay for the issuer’s securities.
		Credit derivatives may enhance the issuer’s credit quality to suit investor tastes, or may prove useful in guaranteeing a customer’s obligations under a long-term contract or lease.
		A credit default swap typically pays off at the occurrence of a "credit event" that amounts to a default, so would not be suitable for trading exposure to a non-performing loan portfolio — which is already in default.
	www.margrabe.com /CreditDerivatives.html (9933 words)

	FASB: Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk ...
		The analysis of that example indicates that the economic characteristics and risks of the embedded credit derivative are clearly and closely related to the economic characteristics and risks of the debt host contract.
		Thus, the economic characteristics and risks of the embedded derivative feature are not clearly and closely related to the economic characteristics and risks of the debt host contract and, accordingly, the criterion in paragraph 12(a) is met.
		Consequently, the economic characteristics and risks of the embedded derivative feature are not clearly and closely related to the economic characteristics and risks of the host contract and, accordingly, the criterion in paragraph 12(a) is met.
	www.fasb.org /derivatives/issueb36.shtml (1410 words)

	Credit Derivatives: Friend or Foe?
		Credit derivatives still account for just slightly more than one percent of the overall market for derivative contracts among commercial banks.
		However, the overall derivatives market increased less than three-fold from 1997 to 2003, while the credit derivatives market grew nearly sixteen times over.
		As a sign of the market’s increasing maturity, credit indices now come from different providers, and a heated battle has ensued over which set of indices will emerge as the industry standard.
	www.celent.com /PressReleases/20040130(2)/CreditDerivatives.htm (384 words)

	FT.com / Home UK / UK - GM downgrades spark rise in credit derivative trading
		Trading in credit derivatives has surged in recent weeks, partly because investors have tried to protect themselves from falling bond prices after events such as the ratings downgrades for General Motors, bankers say.
		Credit derivatives are financial instruments which derive their value from corporate bonds and are used in order to take positions in credit markets, such as hedging risk.
		The high volumes are striking because the widespread trading of credit derivatives indices barely existed a year ago.
	www.ft.com /cms/s/f8b6676a-a9ef-11d9-aa38-00000e2511c8.html (634 words)

	Managementor
		Credit derivatives can be used to separate the transaction of lending from the associated risk.
		Credit derivatives enable banks to extend further credit, as all additional credit exposure beyond normal credit limits can be covered by the credit derivatives.
		It is difficult to price these derivatives as credit exposure and the probability of default is very difficult to quantify.
	www.themanagementor.com /KMailer/Finance/creditderivative.asp (660 words)

	Credit derivative jobs
		Credit Derivatives Documentation challenging opportunity to an individual with proven experience in the coordination of confirmation production for Credit Default Swaps.
		A detailed knowledge of risk management for trading desks involved in credit derivatives and corporate bonds is essential.
		Experience of equity derivatives is desirable, and the successful candidate will have previous practice at managing a small team.
	www.credit-deriv.com /crejobs.htm (922 words)

	Lehman Brothers - Fixed Income - Structured Credit Trading - Portfolio Credit Derivatives
		Portfolio Credit Derivatives are used to offset or take on credit exposure to a group of credits utilizing mechanics similar to default swaps.
		One example of a portfolio credit derivative is a synthetic collateralized loan obligation (CLO) that combines securitization and credit derivative technologies.
		Clients are advised to make an independent review and reach their own conclusions regarding the economic risks and benefits of any structured transaction and the legal, credit, tax, accounting and other aspects of such transaction in relation to their particular circumstances.
	www.lehman.com /fi/sct/def_portfolio_credit.htm (345 words)

	Credit Default Swap Players Play Hard
		The International Swaps and Derivatives Association has reported a 44 percent increase on credit derivative notionals in the first half of 2004.
		A credit derivative trader at Nomura in London points out that the CDO and CDS markets are increasingly building on each other.
		Sources say some of the most active banks in credit derivatives are making 25-30 percent of their revenues in this market from hedge funds.
	www.fenews.com /fen41/euro_angles/euro_angles.html (1221 words)

	European Angles Column: Different Breeds of Credit Derivative Hedge Funds
		One credit hedge told Financial Engineering News that the correlation dislocation that followed the Ford and General Motors downgrades in May seems “to have silenced a few of the regulators” who had been pounding on about the potentially bad effects that such funds pose the market.
		Credit hedge funds often have to explain the many different ways of investing in the structured credit market.
		As most credit hedge fund managers come from the investment banking industry they should be in a good position to choose the right arranger bank for particular deals.
	www.fenews.com /fen46/euro_angles/euro_angles.html (1871 words)

	Quantifi - Credit Derivative Models and Risk Analysis for Synthetic CDOs, Credit Default Swaps, Options on CDS and ...
		In the rapidly evolving credit markets, the ability to price and support new products in a timely fashion can be crucial to success.
		Quantifi is the credit specialist that answers the challenges of the credit markets with the most comprehensive and powerful suite of credit derivative pricing models and risk analysis available today.
		Quantifi's unique experience in the credit markets along with our ability to translate research into robust, real-world implementations provides you with tools you can use with confidence, power and precision.
	www.quantifisolutions.com (246 words)

	Structured Credit Products
		Credit derivatives transfer credit risk between counterparties using off balance sheet instruments.
		Synthetic securitizations utilize off balance sheet transactions to structure credit risk portfolios referencing a variety of credit assets with and without active portfolio management.
		RIGHTS™ (Reference Investment Grade Hybrid Transactions) are credit linked notes or derivative structures that enable investors to leverage a diversified portfolio of high grade credits.
	corp.bankofamerica.com /public/products/credit.jsp (298 words)

	Credit derivative - Definition from Investor Dictionary - Define meaning of the word Credit derivative (Site not responding. Last check: 2007-11-04)
		Credit derivative - Definition from Investor Dictionary - Define meaning of the word Credit derivative
		An over-the-counter (OTC) derivative designed to assume or shift credit risk, that is, the risk of a credit event such as a default or bankruptcy of a borrower.
		For example, a lender might use a credit derivative to hedge the risk that a borrower might default or have its credit rating downgraded.
	www.investordictionary.com /definition/credit+derivative.aspx (222 words)

	FT Knowledge: Joint Training Initiative for Leading Banks in Korea (Site not responding. Last check: 2007-11-04)
		This would include pricing, documentation, dealing with credit events, and reviewing risks inherent in a CDS.
		Completion of Credit Risk Core Module and/or similar knowledge is required.
		To ensure that you have selected the course that is best suited to meet your current needs, please review the peep- inside provided for some of the modules.
	www.ftknowledge.com /jti-korea/credit_derivatives.html (309 words)

	ABASA: CREDIT DERIVATIVES FOR BEGINNERS: A Few Definitions and Structures
		Also known simply as the Buyer, the party paying a periodic fee in return for a contingent payment by the other party following a Credit Event of the Reference Entity.
		A credit derivative in which the total return of an asset is exchanged for another cash flow.
		A derivative in which the Protection Buyer pays a periodic fee, typically expressed in basis points on the notional amount, in return for a Contingent Payment by the Seller upon occurrence of a Credit Event of the Reference Entity.
	www.aba.com /ABASA/abasa_creditderivatives2.htm (412 words)

	Delaware Bay Risk Solutions – Credit Risk Protection, Put Options, Credit Derivative, Puts, Accounts Receivable, ...
		DBRS is a risk advisory company dedicated to arranging credit risk protection on accounts receivable and related positions via its relationship with Deutsche Bank AG.
		DBRS specifically focuses on credit protection solutions for business organizations with customer credit exposures under accounts receivable obligations in investment grade and sub investment grade.
		Under an exclusive marketing arrangement, credit protection for clients introduced by DBRS will be provided directly by Deutsche Bank AG.
	www.dbrisksolutions.com (173 words)

Try your search on: Qwika (all wikis)