Business Ruling On Whether To Trigger Greek CDS Payouts Expected Friday 2012
A committee of dealers and investment firm representatives is expected to decide whether to trigger payouts on insurance-like contracts designed to protect against losses on Greek sovereign debt Friday, a spokeswoman for the International Swaps and Derivatives Association said.
An anonymous entity requested early Friday that a special committee convened by ISDA to make such decisions impacting the credit-default swap market review whether Greece's intention to use so-called "collective-action clauses" in its domestic-law bonds meant payouts were warranted.
ISDA said that its ruling about the impact of collective-action clauses on CDS could be determined when CACs were formally activated. That occurs when the decision to use them is published in the official Greek Gazette, ISDA said.
There are a net $3.2 billion of CDS on Greek sovereign bonds currently outstanding. These would be settled if the ISDA committee voted to trigger payouts.
An anonymous entity requested early Friday that a special committee convened by ISDA to make such decisions impacting the credit-default swap market review whether Greece's intention to use so-called "collective-action clauses" in its domestic-law bonds meant payouts were warranted.
ISDA said that its ruling about the impact of collective-action clauses on CDS could be determined when CACs were formally activated. That occurs when the decision to use them is published in the official Greek Gazette, ISDA said.
There are a net $3.2 billion of CDS on Greek sovereign bonds currently outstanding. These would be settled if the ISDA committee voted to trigger payouts.
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