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Loan only credit default swap (LCDS)
A credit default swap in which a credit event can be triggered by any of the reference entity's debt obligations but in which only obligations of a certain seniority can be delivered.
Loan-only credit default swap spreads should move in line with loan prices rather than with bond spreads and therefore allow traders to go short loans and to take a view on secured debt against other parts of the reference entity's capital structure.
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