Out in the cold

It’s not easy being a credit derivative investor. Companies in the midst of capital restructuring typically pay attention to bond investors. They are direct capital providers and may have strong covenants to protect their interests. But credit derivative holders end up being red-headed step children. Take Corus. There’s a lively bidding war for the Anglo-Dutch steelmaker. Both suitors, the Brazilian CSN and the Indian Tata, are planning to use high amounts of leverage in their financing package...