Trading in SpaceX-linked credit swaps begins following bond issuance
Credit-default swaps linked to SpaceX began trading on Thursday, following the company's first issuance of high-grade bonds earlier this week, according to Bloomberg. This development allows investors to hedge against potential losses or bet on the company's creditworthiness.
Wall Street bond traders began creating markets for SpaceX-linked swaps after the company issued $25 billion in bonds on Tuesday. SpaceX operates in the rocket, satellite, and artificial intelligence sectors. The bonds have fallen relative to U.S. Treasuries since the initial issuance, indicating selling pressure on the security.
According to the report, traders began providing buy and sell price indicators for the hedges to investors before the bond issuance was announced. A trader's price list showed that the cost of insuring SpaceX against default for five years is about 1.255 percentage points per year, or roughly $125,500 per year for every $10,000,000 insured.
By comparison, the cost of insuring Intel, another chipmaker with similar credit ratings, is about 0.64 percentage points per year.
Credit derivatives act as a form of insurance against a company defaulting on its debt obligations. If a company fails to pay interest on its bonds, the holder of the credit derivative is entitled to compensation. These derivatives typically reflect investors' concerns about credit risk before changes occur in the bond market, as derivatives are generally easier to trade than actual bonds.
SpaceX's 10-year bonds traded at a spread of 1.57 percentage points on Thursday, up from 1.40 percentage points when they were issued on Tuesday.
#SPCX #ElonMuskTalks #TSLA #BTC走势分析 #bachsaisH $SPCXB
Credit-default swaps linked to SpaceX began trading on Thursday, following the company's first issuance of high-grade bonds earlier this week, according to Bloomberg. This development allows investors to hedge against potential losses or bet on the company's creditworthiness.
Wall Street bond traders began creating markets for SpaceX-linked swaps after the company issued $25 billion in bonds on Tuesday. SpaceX operates in the rocket, satellite, and artificial intelligence sectors. The bonds have fallen relative to U.S. Treasuries since the initial issuance, indicating selling pressure on the security.
According to the report, traders began providing buy and sell price indicators for the hedges to investors before the bond issuance was announced. A trader's price list showed that the cost of insuring SpaceX against default for five years is about 1.255 percentage points per year, or roughly $125,500 per year for every $10,000,000 insured.
By comparison, the cost of insuring Intel, another chipmaker with similar credit ratings, is about 0.64 percentage points per year.
Credit derivatives act as a form of insurance against a company defaulting on its debt obligations. If a company fails to pay interest on its bonds, the holder of the credit derivative is entitled to compensation. These derivatives typically reflect investors' concerns about credit risk before changes occur in the bond market, as derivatives are generally easier to trade than actual bonds.
SpaceX's 10-year bonds traded at a spread of 1.57 percentage points on Thursday, up from 1.40 percentage points when they were issued on Tuesday.
#SPCX #ElonMuskTalks #TSLA #BTC走势分析 #bachsaisH $SPCXB