Economics, Econometrics and Finance
8 years ago

Credit Default Swaps Boost Recovery Rates for U.S. Corporate Defaults.

SSRN Electronic Journal
Credit Default Swaps and Loss Given Default: Has the CDS Market Affected the Recovery Rates of U.S. Corporate Defaults?
Min Qi, Dragon Yongjun Tang, Deming Wu, Hong Yan

Paper Summary

Related papers

Economics, Econometrics and Finance
2 years ago

New simulation method revolutionizes pricing of complex credit derivatives!

Credit Risk
Option Pricing
Banking Finance
2 views
Economics, Econometrics and Finance
4 years ago

New Credit Risk Tools Revolutionize Management of Financial Portfolios!

Credit Risk
2 views
Economics, Econometrics and Finance
4 years ago

New model predicts credit risk contagion, revolutionizing financial risk assessment.

Credit Risk
1 view

The study looked at how credit default swaps (CDS) affect the recovery rates of companies in financial distress. They found that firms with CDS contracts before bankruptcy tend to have higher recovery rates for their debts. This means that bondholders may get more money back when a company goes bankrupt if they have CDS contracts. The study suggests that CDS might lead companies to file for bankruptcy sooner, which could benefit bondholders in the end.