Credit Default Swaps (Recap)
A Credit Default Swap (CDS) is a contract in which the writer offers the buyer protection against a credit event in a reference name for a specified period of time in return for a premium payment.
Typical CDS cash flows
The buyer pays a premium quarterly in arrears.
The contract pays par in return for 100 nominal of debt if the reference name suffers a credit event before the maturity of the deal.
Note that settlement can take various forms, but as seen above is definitely moving towards