Gannett, which publishes USA Today, appears to be in a situation where many of its creditors are indifferent to whether or not the company is able to manage its multibillion-dollar debt load. In fact, the creditors might prefer that Gannett be forced to seek bankruptcy protection, the article suggests.
That’s because many of those creditors are protected by credit default swaps, which pay them the full face value of their debt in the event of a bankruptcy.
Greenspan was right, these fascinating feats of financial engineering open a whole new world of wonderment and riskless opportunity.
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