Before revision:  Geometric Arbitrage Theory , where a generic market is modelled with a principal fibre bundle and arbitrage corresponds to its curvature, is applied to credit marketsto model default risk and recovery, leading to closed form no arbitrage characterizations for corporate bonds  .
After revision:  Geometric Arbitrage Theory , where a generic market is modelled with a principal fibre bundle and arbitrage corresponds to its curvature, is applied to credit marketsto model default risk and recovery, leading to closed form no arbitrage characterizations for corporate bonds , as well as the generic dynamics for credit market allowing for arbitrage possibilities. Moreover, arbitrage credit bubbles for both base credit assets and credit derivatives are explicitly computed for the market dynamics minimizing the arbitrage .