Using CDS to make companies insolvent

I came across this article in FT by Mark Sunshine, President and COO of First Capital. He points to a practice in financial markets that uses CDS and bets on making companies insolvent. The modus operandi in short is :

Recently, it was reported that banks have started tying commercial loan interest rates to the price of a borrower’s CDS. This seemingly innocuous loan provision allows speculators to bet that a borrower’s stock price will go down while insuring that the bet pays off by manipulating the borrower’s CDS prices upward

The article explaisn with help of an example as well. Intersting application of CDS !

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