@article {Nance58, author = {Martin Nance}, title = {Credit Derivative Product Companies: A Robust Business Model }, volume = {14}, number = {3}, pages = {58--61}, year = {2008}, doi = {10.3905/JSF.2008.14.3.058}, publisher = {Institutional Investor Journals Umbrella}, abstract = {Much has been written about the implosion of the structured credit markets and the impact on a variety of different types of structured credit vehicles, many of which have collapsed. However, little attention has been paid to one type of vehicle that has successfully weathered the storm; that vehicle is a credit derivative product company ({\textquotedblleft}CDPC{\textquotedblright}), which now occupies a small but growing position in the $62 billion credit derivatives market. A CDPC is a triple-A rated entity that is a net seller of credit protection in the form of credit default swaps ({\textquotedblleft}CDS{\textquotedblright}). This article provides some background on CDPCs that focus on corporate credit risk; explains how they are structured and who invests in them; contrasts their attributes with those of other structured finance vehicles, including monoline insurance companies; and explains the needs in the credit derivatives market that CDPCs satisfy, including the major credit default swap dealers{\textquoteright} need for credit backstops and banks{\textquoteright} need for a vehicle to absorb the mark-to-market risk that arises from CDS being derivatives.TOPICS: Credit default swaps, derivatives}, issn = {1551-9783}, URL = {https://jsf.pm-research.com/content/14/3/58}, eprint = {https://jsf.pm-research.com/content/14/3/58.full.pdf}, journal = {The Journal of Structured Finance} }