November 1, 2014
ISDA to determine when Argentine CDS is paid
The International Swaps and Derivatives Association (ISDA), which declared Argentina in default as of July 30, decided to resume discussions over an auction to settle Credit Default Swaps (CDS) contracts on Thursday, while it determined statements made by the Argentine government before its July 30 “credit event” do not trigger payment on CDS contracts that expired before that date.
The committee considered Economy Minister Axel Kicillof’s mid-June statements that a June 30 coupon payment would be “impossible” to make due to a US court order, could not be considered a “repudiation or moratorium event”.
Holders of some Argentine CDS contracts that expired before July 30 asked ISDA to consider whether their protection could be extended under those definitions on the hope they would receive a payout.