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Reference.org
Recovery swap
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<p>In <a href="/facts/Finance/fLh1GgN8">finance</a>, recovery swaps, recovery locks, or recovery default swaps (RDS) are derivative contracts related to <a href="/facts/Credit_default_swap/PPsAwQhs">credit default swaps</a>, and reference a <a href="/facts/Bond_(finance)/qlmpLj0k">bond issuance</a> as its <a href="/facts/Underlying/J9S15NxX">underlying</a>. They are designed to provide a hedge against the uncertainty of recovery in default. </p><p>The <a href="/facts/International_Swaps_and_Derivatives_Association/mNn9fWk3">International Swaps and Derivatives Association</a> does not keep records on the size of the recovery swap market because there has not yet been sufficient member demand. </p>