No payout on Greek CDS insurance, rules ISDA
Greece has not triggered a payout on credit default swaps by its recent moves to prepare for a debt restructuring, the International Swaps and Derivatives Association said on Thursday.
The 15 ISDA committee members voted unanimously that teh Greek debt deal with bondholders did not meet the ISDA definition of a credit event.
The ruling means holders of these insurance contracts, worth a net $3.25bn, will not receive payment at this stage, though further rulings based on any new questions are still possible.
The committee was asked to consider whether a 'credit event' had occurred as a result of new Greek legislation that could force all bondholders to accept losses and after the European Central Bank took steps to avoid losses on its Greek bonds.
The 15 ISDA committee members voted unanimously that this did not meet the ISDA definition of a credit event.
However, the Europe, Middle East and Africa determiniations committee said in a statement: "The situation in the Hellenic Republic is still evolving and today’s EMEA DC decisions do not affect the right or ability of market participants to submit further questions to the EMEA DC relating to the Hellenic Republic nor is it an expression of the EMEA DC’s view as to whether a Credit Event could occur at a later date, in each case, as further facts come to light."
Greece has not triggered a payout on credit default swaps by its recent moves to prepare for a debt restructuring, the International Swaps and Derivatives Association said on Thursday.
The 15 ISDA committee members voted unanimously that teh Greek debt deal with bondholders did not meet the ISDA definition of a credit event.
The ruling means holders of these insurance contracts, worth a net $3.25bn, will not receive payment at this stage, though further rulings based on any new questions are still possible.
The committee was asked to consider whether a 'credit event' had occurred as a result of new Greek legislation that could force all bondholders to accept losses and after the European Central Bank took steps to avoid losses on its Greek bonds.
The 15 ISDA committee members voted unanimously that this did not meet the ISDA definition of a credit event.
However, the Europe, Middle East and Africa determiniations committee said in a statement: "The situation in the Hellenic Republic is still evolving and today’s EMEA DC decisions do not affect the right or ability of market participants to submit further questions to the EMEA DC relating to the Hellenic Republic nor is it an expression of the EMEA DC’s view as to whether a Credit Event could occur at a later date, in each case, as further facts come to light."