Glencore Bears Dust Off Forgotten Credit Swaps for Cheap Short
- Trading in swaps tied to Xstrata surge amid market turmoil
- Xstrata credit swaps converge with Glencore as risk rekindled
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As the investing world rushed last week to sell anything related to Glencore Plc, traders in the credit market turned to an all-but-forgotten derivatives contract in a bid to juice their bets against the commodities giant.
Trading in credit-default swaps tied to Xstrata Ltd., the coal exporter that Glencore bought in 2013, surged six-fold last week as increasing concern the company will struggle to weather the commodities slump prompted investors to search for cheap shorts on other entities within the firm’s empire.