Wirecard Debt Swaps Pay Funds $208 Million After Insolvency (2)

Hedge funds and investment firms that bought credit insurance on Wirecard AG will receive $208 million in compensation after an accounting scandal at the German digital payments company ended in insolvency.

Firms holding credit-default swaps on Wirecard will receive 89% of the amount covered by the instruments, according to final results of an auction to settle the contracts on Wednesday. A committee of traders ruled last month that Wirecard’s insolvency filing constituted a bankruptcy credit event. CDS contracts are commonly used by hedge funds to make bets on a company running into trouble and by bond investors to hedge their ...