Historically, decisions on whether to advance money to a customer rested with the lender. The advent of credit derivatives allows for capital markets participants to shift the credit risk associated with loans and securities. Credit default swaps (CDS) dominate the credit derivative landscape. Other types of credit derivatives discussed include total returns swaps and credit indexes. Cash instruments covered include collateralized debt obligations (CDOs) along with collateralized loan obligations (CLOs) and collateralized bond obligations (CBOs). Credit linked notes (CLNs) are also discussed.
Course Objectives
By the end of the course, participants will be able to:
- Describe the features and characteristics of credit derivatives
- Comprehend the risks associated with credit derivatives
- Know how credit derivatives are used in the financial markets
- Identify respective market participants
- Explain the fundamentals of pricing
Suggested Prerequisites:
- Fundamental of the Capital Markets / Securities Industry or equivalent knowledge
Program Level:Foundational
Advance Preparation: None
Computers and Financial Calculators: N/A
Recommended CPE Credits: 7