CONTINGENT CREDIT DEFAULT SWAP (CCDS)

A variation on the credit default swap (CDS). In a simple CDS, payment under the swap is triggered by a credit event, such as non-payment of interest. In a contingent credit default swap (CCDS), the trigger requires both a credit event and another specified event.

The second trigger in a CCDS is usually a market or industry variable. A CCDS is generally employed to protect specific exposure when larger industry or market forces have deteriorated.