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EM CDS Basis
Hi everybody. I am looking at CDS basis across a variety of emerging markets. There is a strong relationship between swap spreads and CDS spread, but the basis is wider for riskier credits. I supposed this is related to the negative credit view since buying protection should be simpler (and costless) than borrowing bonds for selling short. Are there other factors why the CDS basis increases with credit quality?I´ll appreciate any comment.