Inverted CDS Term Structures, At Very Low Spreads

Incredible term structure for the CDS of some companies, like Duke Energy below:



By buying protection for 10 years at 38bps and selling protection, on the same notional amount, for 50bps, you pocket 12bps risk free for 5 years. Not only that, you get a high-value option for cheap: you get the right to start paying, in 5 years, 38bps per year to profit (handsomely!) if Duke's situation deteriorates in years 6 through 10.