Wall Street creates new credit-default swap index to bet against private credit

    https://www.reuters.com/legal/transactional/wall-street-creates-new-credit-default-swap-index-bet-against-private-credit-2026-04-10/

    Posted by thinkB4WeSpeak

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    1. My comment got removed for being too short because it must engage with the content. But the article is paywalled and I am functionally restricted from engaging with the content of the article. So I am making this longer version to ask OP to just post the body of the article in here so that we may engage with it. Please. I don’t know how long is long enough.

    2. April 10 (Reuters) – S&P Dow Jones Indices is launching a new credit-default swap index linked to the private credit market, giving investors a tool to bet ​against a sector that has faced turbulence in the last ‌few months.
      The CDX Financials index includes a broad range of 25 North American financial entities, spanning banks, insurers, real estate investment trusts and business development companies (BDCs).
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      Credit default swaps ​are derivatives that offer insurance against the risk of a bond ​issuer – such as a company, a bank or a sovereign ⁠government – not repaying their creditors.
      The new index arrives as private credit funds face their ​most serious stress test since the sector’s rapid expansion following the 2008 financial crisis.
      “This ​index evolved through feedback with various market participants, including the several dealers who plan on providing liquidity and various end users,” said Nicholas Godec, head of fixed income ​tradables & commodities at S&P Dow Jones Indices.
      “One exciting feature of the new ​index is that it is the first instance of CDS linked to BDCs, thereby providing ‌CDS ⁠linked to the private credit market.”
      The pace at which investors are demanding money back from non-traded private credit funds has accelerated in recent months on fears that artificial intelligence will upend software businesses financed by them.
      Apollo Debt ​Solutions, Ares Capital (ARCC.O), opens new tab ​and the biggest non-traded ⁠BDC, Blackstone Private Credit Fund, will together comprise 12% of the equally weighted index.
      Major banks, including Bank of America, Barclays, Deutsche Bank ​and Goldman Sachs, will start selling the derivatives next ​week, with ⁠more lenders possibly to come, the Wall Street Journal reported earlier on Friday, citing people familiar with the matter.
      Reuters reported last month that Goldman Sachs was ⁠pitching ​hedge funds a financial product that allows ​them to take a short or long position on corporate loans, citing a source familiar with ​the matter

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