What is a reference obligation?
The reference obligation is the specific issue of a debt security upon which the two parties in the credit derivative transaction are betting against each other. For example, the 5-year bond of a company, bank or country.
What is red code CDS?
RED codes are used to confirm trades on MarkitSERV and other trade matching and clearing platforms, facilitating straight-through processing. Counterparties can rapidly agree on transactions and have confidence in the integrity of the underlying CDS reference data.
What is a reference bond?
Reference Bond(s means, as at the Reference Date, the then current on-the-run government securities that would be utilised in pricing new issues of corporate debt securities denominated in the same currency as the Notes, as determined by the Financial Adviser.
Where are credit default swaps traded?
over-the-counter (OTC)
Credit default swaps are traded over-the-counter (OTC), which means they are non-standardized and not verified by an exchange. That’s because they are complex and often bespoke. There is a lot of speculation in the CDS market, where investors can trade the obligations of the CDS if they believe they can make a profit.
Who is the reference entity?
The reference entity is the organization that issued the reference asset (bond or other debt-backed security) that, in turn, is the subject of a credit derivative. The reference entity can be a corporation, government, or other legal entity that issues debt of any kind.
What is the second obligation under reference?
Answer: A reference obligation is a specially designated debt obligation upon which a credit derivative, such as a credit default swap, is based and is issued by the reference entity. It does not represent all the forms of debt issued by the entity, but only a specific obligation.
Who bought credit default swaps?
CDSs require at least three parties: The first party is the institution that issues the debt. This party is also known as the borrower. The debt buyer is the second party, who will also be the CDS buyer if the parties decide to engage in the contract.
What is reference asset?
A reference asset is an underlying asset used in credit derivatives to protect a debt holder against a potentially risky borrower. A reference asset is also known as a reference entity, a reference obligation, or a covered obligation. A reference asset can be an asset, like a bond, note, or other debt-backed security.
How much did Michael Burry make on credit default swaps?
2. Goldman Sachs offers to sell him $5 million in credit default swaps to Scion Capital. Burry buys $100 million, and another $200 million to Deutsche.
What is a reference portfolio?
A reference portfolio refers to a low-cost, passive portfolio designed to express a fund’s risk appetite. It typically consists of risk assets and safe assets.
What was Jared vennett job?
Meanwhile, Deutsche Bank executive Jared Vennett (Ryan Gosling) inadvertently discovers Burry’s credit default swap creation, and—agreeing with Burry’s analysis of the market—decides to start selling them. One of his clients is hedge fund manager Mark Baum (Steve Carrell).
What are reference assets?
Does the Cppib pay tax?
Tax strategy For sound public policy purposes, income earned by CPP Investments and its subsidiaries is exempt from tax in Canada.