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Nope! Blackstone has successfully done it before: https://www.bloomberg.com/view/articles/2013-12-05/blackstone-made-money-on-credit-default-swaps-with-this-one
by yellowstuff 9y ago
Nope! Blackstone has successfully done it before: https://www.bloomberg.com/view/articles/2013-12-05/blackstone-made-money-on-credit-default-swaps-with-this-one-weird-trick https://www.bloomberg.com/view/articles/2013-12-05/blackston...
- dogruck 9y agoThanks for the link. That article makes this intriguing point: “But you shouldn't overstate that value. The reason that Blackstone made money on its credit-default swaps is not just that they were triggered by this clever maneuver. Just triggering CDS is not a big deal, because CDS pay out based on the difference between the face value of a bond and its post-default trading value.” Is the same thing going on in this new deal?
- whatok 9y agoAll of the outstanding bonds except two of their smaller issues are being quoted above/close to par. CDS has not been triggered yet so can't really say but around those prices BX would probably lose money.