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Anchorage Caught Short in Chatham's McClatchy Trade

  • Hedge fund among firms that had been buying CDS on publisher
  • Trade threatnened by deal McClatchy and Chatham have struck
Trading On The Floor Of The NYSE As Stocks Retreat Before Price Data
Photographer: Michael Nagle/Bloomberg

Anchorage Capital Group is among the firms caught on the opposite side of a credit-default swaps trade that has sparked the latest round of consternation in the CDS market.

The $17 billion hedge fund had been betting against McClatchy Co. by buying credit derivatives that would profit if the newspaper company’s fortunes sour, according to people with knowledge of the matter. But the trade could now backfire, after Chatham Asset Management struck up a deal with the publisher that threatens to make those swaps all but worthless.