In this example, we highlight the double risk of entering into a CDS. Birkdale was bought from Augusta on a notional of $10 million as CDS referencing the Muirfield Plc bonds. However, before the end of the year, Muirfield Plc defaults, and therefore, of course, Birkdale would expect a huge payout on the CDS here. However, after this event, it turns out that Augusta cannot pay out on the CDS here. So Birkdale very much did the right thing here in protecting themselves against credit deterioration on the Muirfield bonds. However, they failed to recognize the huge counterparty risk that they had against Augusta. This of course happened in real life during the financial crisis of 2008, while several market counterparties had bought protection in the market, but there was a very real risk that counterparties would not be paying out on those commitments.