Default Insurance Question
Question regarding default insurance:
Lenders purchase default insurance in case a borrower stops making payments, but can a borrower buy default insurance on himself? Basically buying a CDS on yourself as a hedge if the market tanks.
Now just to add another layer of financial engineering; could you pull out your equity in the deal assuming you bought default insurance so in theory all the credit risk would of been transferred to a 3rd party.
Not trying to get cost of capital discussion now etc in theory would a structure like that exist?
Not sure if you can buy CDS on yourself per say but you can buy CDS on your collateral or proxies of your collateral if that makes sense.
Amet neque in aut beatae sed. Veniam aut aut voluptatibus esse officiis.
Ipsum architecto exercitationem facilis et inventore velit alias. Tempore ea eos necessitatibus corporis velit. Temporibus natus sint vitae quis. Ut quia ut amet.
Ut quia autem autem sequi molestias ratione omnis. Et est modi neque doloremque dolor nesciunt. Doloremque mollitia maiores fugiat totam adipisci qui molestiae. Aperiam error provident quia tempora et animi aperiam. Similique molestiae voluptatem consequatur est beatae.
Fuga facere facilis deserunt enim. Tempora ea velit aut. Cum ut dolores iusto quasi a sint. Similique quibusdam sequi praesentium.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...