Firms’ credit default swap exposure lower than debt


NEW YORK: The amount of debt outstanding at General Motors Corp, Ford Motor Co, General Electric and others dwarfs the amount of credit default swap (CDS) risk on the companies, according to new data.

The data contrast with fears that CDS volumes have surged to represent several times the amount of debt they insure, and that the high volumes raise the risk that protection sellers will be unable to make payments when borrowers default.

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