How's That Credit Hedge Working Out for You?

The ECB's corporate bond buying highlights a long-running difficulty in the credit market.

Mario Draghi, president of the European Central Bank (ECB).

Photographer: Martin Leissl/Bloomberg *** Local Caption *** Mario Draghi

The European Central Bank's "shock and awe" corporate bond buying has failed to impress one corner of the credit market.

Bank of America Corp. analysts led by Ioannis Angelakis point out that while the corporate-sector purchase program (CSPP) has suppressed risk premiums in the market for cash debt, it's done little to tighten spreads in the synthetic market composed of credit default swap (CDS) indexes. 

To continue reading this article you must be a Bloomberg Professional Service Subscriber.