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ISDA CDS Trigger Decision Is Unanimous
EMEA DC Statement
March 9, 2012
In light of today’s EMEA Determinations Committee (the EMEA DC) unanimous decision in respect of the potential Credit Event question relating to The Hellenic Republic (DC Issue 2012030901), the EMEA DC has agreed to publish the following statement:
The EMEA DC resolved that a Restructuring Credit Event has occurred under Section 4.7 of the ISDA 2003 Credit Derivatives Definitions (as amended by the July 2009 Supplement) (the 2003 Definitions) following the exercise by The Hellenic Republic of collective action clauses to amend the terms of Greek law governed bonds issued by The Hellenic Republic (the Affected Bonds) such that the right of all holders of the Affected Bonds to receive payments has been reduced.
The EMEA DC has resolved to hold an auction with respect to the settlement of standard credit default swaps for which The Hellenic Republic is the reference entity. To maximise the range of obligations that market participants may deliver in settlement of any such credit default swaps, the EMEA DC has agreed to run an expedited auction process such that the auction itself will take place on March 19, 2012. In light of this expedited auction process, market participants should submit any obligations that they would like to include on the list of deliverable obligations to ISDA as soon as possible.
Full determination:
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you tell um moose
This is the same debate as American Healthcare ... would you buy insurance if you get the same medical services that those with insurance get by showing up in the emergency room?
Let us see how our Supreme Court decides!
Is the depression over?
Makes the markets moving higher, ben & mario will provide for the necessairy steps, I wouldn't bet against it!
Priced in... or not, maybe. Market is comatose.
apparently we now live in a world where soveriegn defaults don't matter ...
If a tree goes bankrupt in a forest and no one cares, then fuck those trees. I'm getting my chainsaw.
defaults the size of Greece and maybe Porugal (we will soon see) can be papered over with lies and printing, but Spain? no one would get outta that one intact.
How are the algos programmed to react to a sovering default? They should be interesting to track.
Tyler - hope you post the algo charts later!
This is gonna be real interesting cause the CDS can't pay full value...
they're saying this is only going to be a $3B event ... and possibly a lot less than that. I don't understand how this went from 'TEOTWAWKI' to 'NO BIGGIE'
Whatever. Now back to your regularly scheduled programming ...
Obviously a glitch in the Matrix...
90% of the bondholders voluntarily fucked themselves over to the tune of what 100 billion? To save the world.
Those who didn't, are making out like bandits. What was that yield?
So is this a "boom" or "bullish"? I am confused.
everything is bullish.
"Bull Shit" is more accurate than "bullish" IMHO
boomish. It will be a slow motion boom. Do I hear the sound already of collapsing financial institutions?
So the ECB wins. They get theirs. Greece is stripped of whatever is left and is kicked to the curb?
sweet... more greek strippers
.........And I promise I won't cum in your mouth.
You'd think THIS would send gold to the moon. But no...NOTHING. Obvously these guys don't think like ordinary sensible people. It's paper they want. Paper money. ROI, in paper money.
Of course not. This whole Greek-thing is a non-event as I said so many times. We're still alive, after all. The only thing is: the written off private debt will soon be replaced by an even bigger amount of fresh Eurozone-debt. Does that help the Greeks?
No, as reported here earlier today Greece's debt actually increased even in this little swap. Maybe having German taxpayers instead of German depositors on the hook is supposed to help...but I doubt it will.
The retroactive change to bond indentures is anything but a non-event. The way this whole thing went down will (or at least should) forever change the sovereign debt markets.
only for those who can't print the currency their bonds are denominated in...
Yeah, just one more good dump on gold and I will load up the last bit I want. Just one more.
Sometimes it takes the "brilliant ones" some time to figure out what just happened. DUH!
So, the ISDA committe members have greater profit potential than exposure....wouldn't you know it! Wow, this is amazing, parties with huge conflicts of interest actually get to vote on whether they pay out or get paid...fucking unbelievable!!! We are sooooooooo fucked!
I bet Lloyd Blankfein had a huge smile and creamed his pants when he heard the news!
Warren Buffet probably just shit a brick. He is all up in that phoney insurance business.
Shitting a brick seems to be quite the opposite of being "liquidated."
Yippee! and yikes!
i picked a fine time to sell my inverse ETFs
No Dow 13,000 today?
Oh yeah took a minute for the algos to ramp.
Bullish for US equities? Or bullish for US equities?
Er....WHY? I'd be selling...
And, has the massive dump of PIIGS bonds already begun? Rates skyrocketing, anyone?
Doesn't work like that you picklekisser.
+2 for picklekisser alone.. Damn I'm sheltered.. ha
LookingWithAmazement is a tard....just earlier today he was telling 'consumer spending is way up'....uh no it isnt, just that what is being bought is being bought on last resort credit.
What's with the auction? If I hold a CDS - and we've had the 'D' - my payout is defined in the contract, no?
OK, who's got the magnifying glass to read the fine print on the CDS dox....come to think of it, where are the dox???? WILBUR!!!
I assume the fools who participated in the Greek olive oil rapefest forfeited their CDS rights, whether they knew it or not...so the question is how many nonparticipants there are and who is counterparty to those CDS instruments. May be containable damage.
What if there was fine print in the Greek offering that said you forfeit claims just by clicking on it or submitting anything, even if you didn't accept the new terms? LOL how much would that suck???
Do not worry .They are in the hands of the document custodians
of the RMBS trusts,er banks, what could go wrong !
I can't imagine that. A bond and a CDS are completely unrelated claims and contracts. It seems odd that one contract would add terms and stipulations regarding another. Not to say it's impossible, or not happening, but it would be an odd dynamic.
Until AAPL breaks the psychology of the market will not change enough to make a big difference.
Flash crash averted by the PPT. Awesome, free money.
10 print "CTRL-P"
20 goto 10
A freaking country defaults, wipes out Billions of investors money. A country on the brink of total collapse, and we just whistle past the graveyard. What a fucked up civilization we have turned into.
slow and methodical brainwashing, er conditioning.
They just turned it quietly into inflation. Taxing everyone in the Eurozone.
Umm, this country has pulled this how many times.. You thought maybe Greece would destroy the world, ha..
I just asked the man on the street what he thought about the developements in greece today. He said, "what developements?".
what man on the street?
So for all us laymen out there. Has greece defaulted or not? Is this a default?
it's nobody's fault
Sorry Frank, but it is Dee's Fault...................... I hate that bitch.
Yes and no. We're all Schrodinger's cat now.
Indeed they have. This is a bonafide soveriegn default.
Yes. Fitch the rating company is declaring it a default.
http://www.businessinsider.com/fitch-downgrades-greece-to-restricted-default-2012-3
"Unlike a disorderly default, in a "restricted" or "selective" default Greece has not actually been declared insolvent."
Close one! Glad everything's gonna be okay.
Bring The Gold
http://www.youtube.com/watch?v=_qO66Rmi1Mw
To us laymen it was always a default in that lenders were not going to get paid back what they were promised. This opinion was officially confirmed by Fitch and the ISDA. They are the ones whose opinions are written into a contract, so no one can argue anymore about whether Greece has defaulted.
Yup, it is. It is official. But they do not care. Priced in. Bullish.
Why not March 15th?
AFK for a while, have to iron my irony.
Beware the ironies of March
and the market is just shrugging this off?
...uh...seriously?
What market?
For the moment anyway. I guess it takes at least 48 hours for hockey-helmeted equity algos to digest 'default'.
It would appear that this is bullish.
I thought I was replying to Marge N. Callz...
http://www.zerohedge.com/news/isda-cds-trigger-decision-unanimous#comment-2240832
And the market doesn't care - Big Surprise!
Why do I get the feeling that the devils in the details, specifically the details of the obligations, who wants what and in what order? There's some fine print out there, a "gotcha" clause or something that will give the banks a payday, but shaft the investor who isn't part of the "network"
I'm sure it took this long to declare it because it took that long for the lawyers and accountants to agree on an interpetation that keeps it up and floating for a lil' longer.
Do black swans swan dive? They just did, the whole flock. That moment of freefall, hanging in the air, we are in it.
Honestly it makes no difference now. In fact, I hope that there is such a 'gotcha clause' since the consequences would almost immediately spillover into Unintended Consequences-land and that, I'm told, is where the Black Swans are often brewed.
Wow. Can't wait to see how this plays out. I was dead wrong. I would have never, in my wildest dreams guessed they would call this a credit event.
There has to be something under the surface here...but what?
the option they REALLY did not like and they one they could not live with... any other decision would have undermined the cds market
Exactly. Derivatives > MFG customer funds... the policy is to protect the derivatives... now, whether or not the counterparties can pick up the slack and, if not, how much printing is needed to backstop them so that bonuses can keep rolling is anyone's guess...
But what?
I'm guessing nothing. They brow beat all the banks to "voluntaraly" take a hair cut. They got suckered. They won't be fooled again.
RUMOUR HAS IT ->>>THE NEXT BIG ELEPHANT IN THE ROOM IS: A PANDORA BOX FULL OF CDS CONTRACTS WITH THE NAME OF PORTUGAL, IRELAND, SPAIN AND ITALY WRITTEN ON THEM..WATING FOR BEN AND HIS HELICOPTER FULL OF USD TO RESCUE EUROPEAN AND OF COURSE THE GERMAN TAX PAYERS...
We can all tell you're an idiot without you shouting, Ted.
"Rumor has it"? Shirley you're joking right? This is not rumor anymore--but inevitable fact.
I can't hear youuuuuuuu
I wonder if there is any particular signifigance as to the timing of the auction.
Is it important to have this wrapped up before the 20th?
HFTs must be keeping this out of their computers. Shhhh!
LOLOF'nL!
So now they are going to conduct an auction to determine the recovery value of the Greek debt in order to calculate the net payout to be made under the CDS contracts, on March 19.
How exactly are they going to calculate this, since the recovery value is deducted from the net face value of the CDS?
but wtf are they auctioning?
What I'd like to know is what's the deal with the portion of Greek CDS contracts that have Modified Modified Restructuring clauses.
Does it change the type of credit event? Do they receive shorter maturity bonds, or is the number of MMR CDS contracts insignificant to have any impact other than multiple auctions?
Raffle tickets.
Actually this was to be expected. Think of the fees the banks would have lost if this small CDS didn't pay.
So who has to pay?
you
and your children
the option they REALLY did not like and they one they could not live with
When it looks like someone has purposely screwed themselves, to your benefit, they probably haven't
This. There is something we don't know yet.
I would think more damage control to continue the illusion that contracts will be honored. Lose the battle so you can win the war.
The CBs are still back to their original options, print or war, and I think we're at the point now where both will increase the price of gasoline.
I just wonder if they hadn't gotten the 70% participation rate, whould they have come back with the same answer?
Trigger Happy Jack
So apparently we really are the crazy ones.
Both of you?
The girls look on the level to me Jim.
I'd like you to meet the twins, MsCreant !
I wish waffen would not be so shy and speak more often.
Sorry,off topic.Look at the poll in marketwatch.RP nearly tied with Mitt.
They just ran Greek default is now official. All those who went on tv and lied... wow.. How do you sleep at night?
What's with Question #7? What exactly does this item mean?
And why is this thing written in English?
sp500 drops 5 handles. Anitclimax. Now, lets go for 1400!
See, defaulting is good. Everyone should try it.
Yes This is Clear default, they had no choice.
They will hold an auction on march 19th and for those who settle at auction will not constitute a credit event ? what are they trying to do with the auction ? Offer some money, bargain and buy the CDS contracts and stop the domino effect ?
CDS's triggered and the indexes still green. Nonevent. I guess the world doesn't end after all....
Dear ISDA; Irakleia. I won it in a poker game. Please confirm my deed, I don't want any money except a tax exemption due to the high level of employment our island maintains.
The Thetas Betas Vegas and Omegas just went down the drain.
Jim Sinclair was wrong all along....
"As the 16th member, I vote NO!"
"failure to pay is not really failure to pay" Quote from Robert Pickel, head of ISDA...LMAO!
So who were the main shorts of that pile of Greek sovereign debt CDS? I guess SuperMario needs to bail them out pretty soon to make sure his GS buddies will be paid out...
Where is my deer in the headlights? hmmm.. CDS payable in greek bonds right..
QE4EVA
You guys are freaking out over a few billion.
A few billion? Earlier articles showed how a 'CDS trigger event' would mean $1 trillion.
Net vs. gross, man. Net vs. gross.
ok finally. so now there is $3billion of hold out private investors. however, it appears that the determination is for the entirety of the swap, so do the peole who swapped get paid? actually no; only holders of CDS contracts will get paid. $3billion is small right? well the nature of CDS is taht we can all buy 'fire insurance on others' homes"---so the notional outstanding CDS on said bond could be substantial. everyone seems to be implying that $3B or even $10B is manageable....but that amount doestn relate to the amount of notional CDS outstanding. the 'house' may only be worth 100k, but all the insurace is worth 10million. lehman failed with 7.2B outstanding....$4 trillion of CB paper later, here we are.
so another $4trillion in paper should make gold 3200/oz; and sp500 at 2000....that is after the panic and once the hyperinflation gets underway.
In the past 20 minutes:
Liesman thinks people can get a mortgage "get in the game " with a poor paying part-time job. His words.
Pisani says the market going higher because of all money on the sidelines...
In other words - all is well. Resume normal programming.
yes, this is the criminal ISDA which was, according to some, never going to let the CDS writers pay out, because they are the majority on the Committee.
ISDA 1
OTHER UNNAMED PARTIES 0
I don't understand. How much CDS are we talking about? There's no way this is an AIG-type event, right? Right? I'm not going to wake up Monday and find out there is no more financial system, right?
Suuuuuuurre all is well, no worries. This is 'Merica after all and nothing bad can happen here. Ever.
Take two quaaludes Sunday night and call me in the morning,...
What's your number?
Whole western world banking system blown up...meh...nothing to see here.
I want you to know SD-1, I plussed you on the 'meh', nothing else...
ooh interesting times.
So, will this apply to those accepting the voluntary restructuring? I think not, so it's a small percentage of bonds and CDS. No? What we'll be seeing is minimal damage.
Yep, Im sure its contained to sub-prime again.
Nah look. The CDS are a token payment. The real pain is the getting fucked over on hundreds of billions of sovereign debt. That happened and obviously will happen again on Italy, Spain, Ireland etc.
CDS have triggered for a couple of holdouts but become irrelevant anyway. They are MAD, nuclear weapons, they cannot be allowed to tigger indiscriminately. So they are just as useless as if they hadn't triggered a credit event at all.
I'm just wondering how long it'll take the bond market to figure it out.
Smoke and mirrors.
I just submitted my list of deliverable obligations. I'm expecting a check for $42,000,000,000,000 in the next few days.
Silly wabbit, don't you know that the conspiracy theory claiming CDS pay notional principal has been discredited.
No market move implies that 100% of sellers must have been posting collateral as CDS prices increased. But is that remotely realistic?
Something smells mighty fishy!
Looks like they just hit the master market 'OFF' switch when this shit went down an hour ago.
on the street an hour ago says Greek gyro vendor to tourist: " I for one welcome our new banker overlords! "
Yes, yes, but are we winning??
Hmmm....question 7 seems interesting.
How much paper was "conditionally transferable" out of their $1.2T I wonder...
"Does this DC agree that Credit Derivatives Transactions to which “Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation” is specified as applicable in the corresponding Confirmation will not constitute Auction Covered Transactions for the purposes of any auction in respect of this Restructuring Credit Event?"
I got stuck on that paragraph as well. Does it mean that any bondholder that has agreed to changes will not be covered by the CDS related auction, and hence without insurance? Can someone please help out with the meaning of this paragraph?
You're not supposed to understand it.
They saw all our comments on the ISDA blog and they were like, WHOA, WE BETTER TRIGGER.
I don't know how many ZHers are hip to "Lost Wages", but i LOVE it!
Drive in, hitchhike out...
Drive in...Burn it all....walk out
Auction for CDS. So does this mean anyone with a claim needs to submit their CDS for an auction price? Will the writers pay up, or will the fed just buys the CDS's with funny money via long term, no interest, loans? Doesn't take much imagination to see how this will go.
Can we conclude now CDS on Government debt might be a valid insurance as long as the the buyer can wait long enough until ISDA finally confirms a default is a default? Is confidence in CDS restored and are the hedgies now going to resume buying CDS on BTP pushing 10Y yields up again? BTP 10Y yield was below 5 pct this week... http://www.bloomberg.com/quote/GBTPGR10:IND
WOW Greece defaults and no one losses nothin no one takes a hit at all FantasyLand ROCKS!
"Unanimous"...sounds fishy to me....
No one is accountable for anything, therefore anything goes...