Credit default swap contract sample
Sample term sheet for a credit default swap traded by XYZ Bank plc Draft Terms – Credit Default Swap 1. General Terms Trade Date Aug 5, 2003 Effective Date Aug 6, 2003 Scheduled Termination Date Jul 30, 2005 Floating Rate Payer (’Seller’) XYZ Bank plc, London branch Fixed Rate Payer (’Buyer’) ABC Investment Bank plc Risks of Credit Default Swap. One of the risks of a credit default swap is that the buyer may default on the contract, thereby denying the seller the expected revenue. The seller transfers the CDS to another party as a form of protection against risk, but it may lead to default.