As 2025 draws to a close, the European CDS market is being forced to confront a question it has long managed to defer: whether credit default swaps are still anchored to economic loss, or increasingly to legal interpretation.

The twin credit events of Ardagh and Altice France have turned that question from theory into practice. Together, they have stress-tested the CDS framework under the kind of complex, liability-management-driven restructurings that now dominate European high yield — and exposed both its resilience and its fault lines.

What has emerged over the past year is not necessarily a system in crisis, but one being stretched faster than its documentation is evolving, leaving investors, lawyers and dealers to navigate outcomes that are legally robust yet economically unfamiliar. 9fin covered many of these concerns ahead of the Ardagh restructuring and DC wranglings in this webinar.