Bank HJK has written puts on Bank PQR stock to a hedge fund and sold CDS protection on Bank PQR to a manufacturer. Bank HJK and Bank PQR operate in several of the same businesses and geographies and their performances are highly correlated. Many in the market are concerned that rising interest rates could negatively impact the credit quality of Bank HJK's numerous borrowers, which in turn would increase the credit spread of Bank HJK. From the perspectives of the hedge fund and the manufacturer, which of the following is correct with respect to their counterparty risk exposure to Bank HJK?