I have some confusion on single name CDS settlement. So suppose as a protection buyer I have multiple derivative contracts of different maturities ( for e.g. IRS) with a reference entity. In the case of credit event of the reference entity will the protection seller pay me /settle all the derivatives contracts outstanding with the reference entity up to the notional amount of the CDS contract?
Assuming the credit event effects all the contracts
Also depending on how contract works but they could pay based on difference between market price of bond and par. Ir you could deliver refrence bond and receive par.
Credit event may not been underlying reference security is worthless.
You will not receive more than notional principal
thanks but the underlying contracts are not bonds, those are also derivatives (IRS), CDS used to hedge the underlying derivatives.