christopher wilder deutsche bank - Credit Derivatives are securities that offer protection against credit or default risk of bonds or loans. The credit derivatives emerging market has grown rapidly and credit derivatives are widely used. This paper describes the emerging credit derivatives market structure. The current market activity is analyzed through elementary pricing dynamics and the study of the term structure of default risk. Focusing on the performance of credit derivatives in stress situation, including legal and market risks, we discuss the potential consequences of a debt restructuring in a large emerging market borrower. The contribution of credit derivatives to the risk sharing in emerging markets is also examined.