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Because credit Susie is “to big to fail” with the CDS likely pricing in the change of a government bail out
by bushbaba 4y ago
Because credit Susie is “to big to fail” with the CDS likely pricing in the change of a government bail out
- topper-123 4y agoEven if if doesn’t fail, the shareholderd might be wiped out though.
- HDThoreaun 4y agoShareholders being wiped out doesn't affect bond holders.
- latchkey 4y agoWhat if bond holders are shareholders?
- rblatz 4y agoTheir share value will be wiped out, and their bonds won’t be.
- warbaker 4y agoUsually bondholders are also wiped out during a bailout. Bailouts are generally for customers / counterparties, not investors. Sometimes in a bankruptcy, bondholders take a "haircut" and agree to get less money back because the company simply can't pay them what they're owed.