Credit-Default Swaps are kind of insurance against defaults. They have been discussed in detail in CFA Level II curriculum. Their spread is the cost of getting insurance in case of default. The higher the default risk, the higher is the spread and vice versa. How European Corporate Bonds and Credit-Default Swaps are performing, is captured by the Business Week Article.
Read the article: http://www.businessweek.com/news/2012-02-13/corporate-bond-risk-falls-in-europe-credit-default-swaps-show.html
Read the article: http://www.businessweek.com/news/2012-02-13/corporate-bond-risk-falls-in-europe-credit-default-swaps-show.html
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