A CDS doesn't necessarily have to be tied to debt, it's basically just a bet whether a third party will or will not go bankrupt. It is commonly used to hedge de

A CDS doesn't necessarily have to be tied to debt, it's basically just a bet whether a third party will or will not go bankrupt. It is commonly used to hedge debt, but it doesn't have to be. See: http://en.wikipedia.org/wiki/Credit_default_swap http://en.wikipedia.org/wiki/Credit_default_swap