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Because credit Susie is “to big to fail” with the CDS likely pricing in the change of a government bail out

Even if if doesn’t fail, the shareholderd might be wiped out though.

Shareholders being wiped out doesn't affect bond holders.

What if bond holders are shareholders?

Their share value will be wiped out, and their bonds won’t be.

Usually bondholders are also wiped out during a bailout. Bailouts are generally for customers / counterparties, not investors.

Sometimes in a bankruptcy, bondholders take a "haircut" and agree to get less money back because the company simply can't pay them what they're owed.