Investors are racing to buy credit default swaps to protect portfolios as the AI boom raises default concerns. Trading volumes surged for CDS instruments that gained prominence during the global financial crisis. More than $9 billion worth of CDS linked to bonds issued by Oracle, Space X, Alphabet, Amazon, Meta, Broadcom and Nvidia were traded weekly in September, up from less than $2 billion in July, according to Morgan Stanley Research.
US corporate CDS index trading volumes have already overtaken last year's total. The cost of buying CDS on many AI-linked companies has hit record highs this month, signaling increasing investor unease over the borrowing binge. Ramsay Hodgson and Euan Healy reported the full story for the Financial Times.
Source: Financial Times Companies · Summarized by HeadlinesBriefing