Markets for credit default swaps (CDS) and bonds of the same reference entity and maturity are bound by no-arbitrage conditions. Indeed, using a large data set we show that CDS premia and par asset swap spreads are mostly cointegrated. Nonetheless, the average CDS-bond basis (i.e. the difference...

Due to globalization, competition has increased and companies have reorganized their activities in order to maintain profitability. The consequence has been an emphasis on short term results, at the expense of long term research. Therefore, most Corporate Research laboratories were closed or...