Google CDS

Google CDS => AAA

5 year CDS starts life at 19bps (via cmadatavision)

Posted by jck on February 2nd, 2010 at 4:24 pm 5 Comments
5 Responses to “ Google CDS => AAA ”
# # 1 Sandrew Says:
February 2nd, 2010 at 6:28 pm

How do you craft a CDS on a reference entity that has no debt on which to default? What types of obligations could they default on? OTC derivatives? Trade payables? I guess that would rule out physical settlement.
# # 2 jck Says:
February 2nd, 2010 at 6:56 pm

Well I answered on twitter: a positive cds premium exists for any corp not expected to last eternally…(i.e hazard rate = 0 means corp will never die). so unless you think google will last forever there is a cds spread regardless of whether there is a deliverable bond *today*
meanwhile thx to the cds market, you can build yourself a synthetic google bond.