CDS spreads

CDS spreads, or Credit Default Swap spreads, represent the cost of insurance against the default of a borrower, like a corporation or government. Essentially, it's the price investors pay to protect themselves from the risk of that borrower failing to meet their debt obligations. A wider CDS spread indicates higher perceived risk, while a narrower spread suggests lower risk. Investors use these spreads to gauge the creditworthiness of borrowers, impacting decisions in areas such as investment and lending. In essence, CDS spreads help quantify the risk associated with lending to or investing in a particular entity.