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Basket credit default swap

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Basket credit default swap
A credit derivative contract that provides a payoff when any of the multiple reference entities default. The contract specifies the number of defaults after which the payoff is generated, based on which the instrument is classified as first-to-default CDS, second-to-default CDS or more generally nth-to-default CDS.


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Given the growth in hedge funds over the last decade, the increasing cost of credit protection on single-name and basket credit default swaps of ABS, and the uncertainty surrounding certain nonconforming residential and credit-card deals, the credit performance data provided by ABSNet is vital.
Given the growth in hedge funds over the last decade, the increasing cost of credit protection on single-name and basket credit default swaps of ABS, and the uncertainty surrounding certain nonconforming residential and credit-card deals, the credit performance data provided by ABSNet is vital.
While most credit default swaps are single name, basket credit default swaps, in which the underlying consists of a basket of underlying credits, are growing in popularity.
 
 
 
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