Evening,
I've been reading up on the articles about Goldman offering clients TR Swaps to bet against European troubled lender's high yield AT1 notes.
However, I can't quite get the mechanics.
In my view, the buyer of the TRS is going long on the underlying without the exposure/risk.
The seller, sure, may receive the depreciation but ultimately owns the underlying note - how is that betting against? That's just a hedge to me...
Thoughts?
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