China Securities Re-Introduces Credit Hedging Tool Amid Rising Defaults

[kreslik.news]

China Securities Co, a Beijing-based brokerage, is planning to issue a credit derivative instrument, restoring an essential hedging tool against default risks as a growing number of firms struggle to pay debts in a declining economy, according to Reuters today.

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In a statement on the website of the National Association of Financial Market Institutional Investors (NAFMII), the brokerage said that the instrument called Credit Risk Mitigation Warrants (CRMWs), the Chinese version of Credit Default Swaps (CDS), will be issued in China’s interbank market.

CRMWs were initially ... (read more)