The pricing of credit default swaps (CDS) is primarily influenced by:
* Probability of Default:The likelihood that the underlying entity will default on its obligations.
* Duration:The term or maturity of the CDS contract.
* Loss Given Default:The expected loss if the underlying entity defaults.
Market spreads, while relevant to bond pricing and other instruments, are not a direct factor in the calculation of the pricing of CDS contracts.
References
* Verified information on CDS pricing factors from the document