Credit Default Swap Data? Best Database Sources for CDS Pricing Data

Credit Default Swap (CDS) Data Explained

Credit Default Swap (CDS) data refers to information on the prices and spreads of credit default swaps, which are financial derivatives used to hedge against the risk of default on debt. Examples of CDS data include current and historical CDS spreads for various entities, such as corporations or countries.

This data is used by investors, analysts, and risk managers to assess credit risk, monitor market sentiment, and make informed investment decisions.

In this page, you’ll find the best data sources for credit default swap data, including CDS spread data, historical CDS data, and country CDS data.

Examples of Credit Default Swap Data

Usually thought of as the most common type of credit derivative, CDS data is made up of municipal bonds data, emerging markets bonds data, mortgage-backed securities data and corporate bonds data. These examples of CDS data are the most common types of OTC credit derivatives and are usually applied in the process of transferring credit exposure on fixed income products with the intention of hedging risks.

Use Cases

Those who are looking to purchase or use this information include debt collection companies. Whether they are looking to contact the individuals to help them with their debt, or if they are looking to provide the necessary coverage based in the contract - credit default swap information optimizes their operations. Debt and risk management can be are important use cases, and with many companies working with individuals who have it, credit default swap information can be vital to ensure companies make the most effective decisions.

CDS Data for Banks

Banks use credit default swap data for hedging purposes. Hedging refers to the process of cushioning against the risk of severe price shifts. Banks are sometimes forced to hedge against the threat that a loan borrower may default on a borrowed loan. In such cases, the bank may be compelled to enter into a CDS contract as a form of risk protection. When this happens, in the event that the loan borrower fails to meet the obligations of loan repayment, the proceeds from the contract balance offset with the defaulted debt. However, in the absence of a CDS, the bank may resolve to sell the loan to another bank or finance institution.

Types of CDS Data

Historical Credit Default Swap Data

Data about the historical credit default swap market is available from three main sources. Data on an annual and semi-annual basis is available from the International Swaps and Derivatives Association (ISDA), which dates back to 2001, and from the Bank for International Settlements (BIS) since 2004. The Depository Trust & Clearing Corporation (DTCC), via its global repository Trade Information Warehouse, provides weekly publicly-available data dating back only one year. For a greater historical look-back, you will be required to buy the CDS data.

Real-time CDS Prices

A great deal of CDS data is documented using systematic forms that are drafted and provided by the International Swaps and Derivatives Association (ISDA). The real-time credit default swap rates listed in the standards forms provided by ISDA can then be stored in databases for CDS data providers such as Trade Information Warehouse (DTCC). However, accessing real-time CDS swap rates may prove to be quite a task given the nature of confidentiality that is associated with this information. That is why data marketplaces like Datarade allow top providers and data vendors to list their CDS data, where users can buy real-time data by either a single-time CDS data purchase or through subscription services.

How can a user assess the quality of Credit Default Swap Data?

The quality of the data is checked through the verification of the information. The information is essential since you want to make sure who you are reaching out to is who the data states it is. The quality of the information may change from time to time though, so it is important to double-check the numbers when you’re looking at this type of debt data. It’s always worth asking for a data sample from a credit default swap data provider before subscribing to their data feed, so as to check that the data can be integrated effectively to your business.