l> MORGAN STANLEY FIXED INCOME RESEARCH See additional important disclosures at the end of this report. 12 May 11, 2006 Using and Trading Asset Swaps Interest Rate Strategy Credit Default Swaps A credit default swap (CDS) is an option to sell (put) bonds at face value with the writer of the option. The option to put bonds can be triggered by a number of credit events. These are described in the ISDA agreements, and each trade confirmation will specify which events serve as trig
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