Where it’s due.

The article examines the use of credit-default swaps (CDSs) to pay the difference between the notional value of a bond and the lowest price at which any of a company's bonds is trading. A particular focus is given to a loan offered by private-equity firm Blackstone to Spanish gaming company Codere after buying credit derivatives on Codere's debt that would have a payout if it missed a bond payment. The development of CDSs as a hedge against losses from defaults is discussed.