# Can I calculate the CVA or DVA over a sovereign portfolio?

Hi I haven't understood if I can apply the CVA just for derivatives or I can estimate the PD from CDS spreads and apply these in a bonds portfolio for the CVA calculus. The CVA literature refers to "counterpart risk", but if I use the PD calculated from the CDS spreads I've the "reference entity risk", can I use this one for the CVA/DVA estimations? Thanks, sorry for my banality.

• @DavidDuarte gives the right answer, you do not compute CVA on bonds because their price already captures credit risk. The only exception I have seen is if the bonds are part of a repo, then you compute CVA on the repo, which requires taking into account the collateral, which in this case is the bonds. Jun 11 '20 at 10:03