It's like a highly leveraged put on the bond.
and thereby sinking the institution relying upon the market value of the bond.
How does the purchase of a swap sink the institution or the bond of that institution? Remember, for every swap you buy, someone else had to sell one.
For every option I buy someone has to sell one. When I buy a bunch of puts, the put/call ratio does what? When the put / call ratio is high, the stock does what? Why does a high volume of open puts affect the price of the stock?