Credit-default swaps tied to Elon Musk's SpaceX have begun actively trading, according to people familiar with the matter. The derivatives allow investors to hedge against potential losses or speculate on the firm's creditworthiness. This comes after the company sold high-grade bonds this week for the first time.
The debut bond sale marks a significant shift for SpaceX, which has traditionally relied on equity and private funding. The move into public credit markets signals growing financial maturity and investor confidence in the rocket maker's long-term prospects.
Viktor Hjort, global head of credit strategy at BNP Paribas, discussed the sale on Bloomberg Real Yield, noting it demonstrates funding across both equity and credit. Specific terms of the bond offering, including size and pricing, were not disclosed in available reports.
Active CDS trading provides a new tool for market participants to gauge risk around SpaceX, though the market remains nascent. The development could also pave the way for more traditional debt financing as the company scales operations.
Some analysts caution that the credit derivatives market for a single, high-growth private company may lack liquidity and transparency, making pricing less reliable than for established corporate borrowers.