The International Swaps and Derivatives Association (ISDA) has decided unanimously today to declare that Greek’s bond swap constitutes a “credit event” and that “the right of all holders of the affected Bonds to receive payments has been reduced,” according to release published by the ASDA late Friday.
Investors that bought Credit Default Swaps (CDS) on Greek debt will get paid. Nevertheless, ISDA Committee will Meet again to discuss Greek credit event on Monday according to Dow Jones.
ISDA has resolved to hold an auction with respect to the settlement of standard credit default swaps that will take place on March 19, 2012. Maximum amount will be $3.16 billion of net outstanding Greek credit default swap contracts but exact amount of money will be determined by the auction.
ISDA follows Rating agencies steps, S&P was said last week that Greece was in selective default while earlier on Friday, Fitch Ratings downgraded Greece to “restricted default”, as expected. This decision comes after Greece completed the bond swap deal with its private creditors on Thursday with a 85.8% participation.
(source: Dow Jones, fxstreet)
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