Template:M summ Credit Derivatives 2.1

The person against whose collapse you are hedging. This will generally be the issuer of a listed debt security — a Bond — or at a pinch, a relatively public syndicated Loan. A straightforward enough notion, complicated by the tendency for corporates to be taken over from time to time. What happens, for example, when Credit Suisse, for some years now a basket case of a credit, with CDS spreads trading widely, becomes such a basket-case that, to stave off Bankruptcy, it is acquired lock, stock and barrel by UBS? Is UBS a Successor, and what should a credit derivative trader, who wisely bought protection on Lucky make of that its sudden return to comparative wellbeing in the arms of its rescuer?