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Why Hedge Funds Could Find It Harder To Push Companies Into Default

FYI: In recent years, some hedge funds have used credit default swaps to “manufacture” corporate defaults, aiming for a handsome profit in the process. But that may become more difficult as corporations erect roadblocks to stop them.

The swaps—financial products designed to help mitigate credit risk—pay out to holders if issuers miss debt payments, file for bankruptcy, or undergo any other “credit event.” But some issuers, arguing that the funds’ actions are abusive, are working to tighten language in debt contracts to restrict lenders’ behavior.
Regards,
Ted
https://www.barrons.com/articles/hedge-funds-could-find-it-harder-to-push-companies-into-default-51564771477?mod=djem_b_Weekly Feed for Barrons Magazine
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