A CLN is similar to a credit default swap (CDS): both transfer credit risk to investors. However, the CLN is FUNDED; the bond owner does not really incur counterparty risk. Instead, the investors (CLN Buyers) incur counterparty risk. Plus, they are concerned with correlation between the CLN Issuer and the reference bond
Questions about Credit linked note (CLN)
Want more info about Credit linked note (CLN)?
Get free advice from education experts and Noodle community members.