Credit derivatives are financial instruments that are designed to separate and transfer the credit risk or the risk of default of a borrower/debtor from the lender/creditor to a third party. Credit derivatives are traded over-the-counter (OTC) between two counterparties. These allow the creditor to minimize their exposure to credit risk and effectively transfer part or all of the risk of default of a debtor to a third party. The third party accepts the risk in return for a payment, called the premium.

Credit derivatives are broadly classified into two categories - funded credit derivatives and unfunded credit derivatives. Unfunded credit derivative products include Credit Default Swap (CDS), Total Return Swap (TRS), Constant Maturity Credit Default Swap (CMCDS), First to Default Credit Default Swap, Portfolio Credit Default Swap, Secured Loan Credit Default Swap, Credit Default Swaption, Credit Spread Option, etc. Funded credit derivative products include Collateralized Debt Obligation (CDO), Credit Linked Note (CLN), Constant Proportion Debt Obligation (CPDO), etc.

We conduct bespoke training programs for valuation of various Credit derivative products. Depending on the needs of the organization and the participant profile, the course would start with learning about the various currency derivative products and then go on to learning their valuations models.