That's basically the same thing as selling the corporate bond and buying a government bond of similar maturity and coupon frequency in the same currency. Thoug

That's basically the same thing as selling the corporate bond and buying a government bond of similar maturity and coupon frequency in the same currency. Though I don't get why you're puzzled on synthetic derivatives, since what you've proposed is a synthetic instrument itself. It's an exchange of upfront payment for an annuity stream. And it's basically the opposite sign of the off-market swaps people in this HN community have already criticised banks for providing as a means of off-balance-sheet funding to some clients. (Eg, Greece and Italy entering into off-market swaps with banks, which is what your proposed contract is, except receiving upfront cash in exchange for the liability of a stream of future payments). Separately, the bank could wrap your annuity stream as into structured note to make it seem more like a cash bond. But then you're back into something even more bespoke and financially complex than a standard contract CDS.