RE: RE: something about credit swap?From what I know it is basically insurance or a hedge against Opti not fulfilling their obligations to pay Nexen. It could just be a good business pre-caution. Found this information on the web:
It is a form of derivative security that can be viewed as default insurance on loans or bonds. Credit swaps pay the buyer of protection a given contingent amount at the time of a given credit event, such as default. The contingent amount is often the difference between the face value of a bond and its market value,paid at the default time of the underlying bond.
The basic credit-swap contract is as follows. Parties A (Nexen) and B (underwirter) enter into a contract terminating at the time of a given credit event, or at a stated maturity, whichever is first. A commonly stipulated credit event is default by a named issuer, say Entity C (Opti), which could be a corporation or a sovereign issuer.