Puerto Rico And Municipal Credit Default Swap Trading Volume 2010-2013
- npatel81
- Feb 10, 2014
- 1 min read
The bankruptcy of Detroit brings new pressure on municipal bond investors and related exchange-traded funds like (HYD) (NUV) (PML) (PZA) (IIM) (NIO) (VMO) specializing in municipal bonds to heighten risk management and to hedge where appropriate. One potential tool in that regard is the single name credit default swap market, which is featured almost constantly in discussions of municipal entity credit risk. A recent example is “Traders Find Short Bets on Puerto Rico a Challenge,” a Wall Street Journal blog. The author notes:
“Default insurance on Puerto Rico, sold in the form of derivatives called credit-default swaps, is available from few dealer banks. The contracts also have barely traded because the protection is not available to buy in meaningful amounts and disclosures from the Commonwealth have been limited, some market participants said.”
The purpose of this blog is to bring clarity and precision to discussions of municipal credit
via SeekingAlpha.com: Home Page http://seekingalpha.com
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