Ep 165 - Total Return Swaps

Total Return Swaps There have been reports in the financial press about the use of Total Return Swaps to provide credit to governments (e.g., Angola), often in situations where the government can't otherwise borrow on capital markets. As best we understand them (i.e., badly) these are derivatives backed by sovereign bonds and sometimes cash as collateral. The collateral reduces borrowing costs and the debt stays off books, since the obligation to pay the bonds is contingent (since the bonds are only collateral). We increasingly hear scuttlebutt suggesting these deals are commonplace, and some of our investor friends complain that TRSs effectively subordinate existing creditors. We don't understand TRSs well, and we have questions. Isn't this just garden variety debt dilution? Does it violate the negative pledge clause? Producer: Leanna Doty

You can listen to Ep 165 - Total Return Swaps online on Radio and Podcast. Open the player on this page to stream the available audio.

Ep 165 - Total Return Swaps is an episode from Clauses & Controversies by Clauses & Controversies.

This episode is 00:29:37 long.

This episode was published on Nov 24, 2025.

Yes. Use the heart button on the episode page to add it to your favorite episodes list.

Yes. This page shows related episodes from Clauses & Controversies when more episodes are available from the podcast feed.