The International Swaps and Derivatives Association, Inc. (ISDA) recently commissioned law firm Linklaters to conduct an independent assessment of the function, governance and membership of the Credit Derivatives...more
The credit derivatives determinations process has, for some time, been clouded in relative mystery. As credit default swap (CDS) strategies have grown more complex and gray-area issues have become more commonplace, advocacy...more
Insurers and fund advisers should consider newly proposed guidance from insurance regulators on funds’ use of derivatives in the context of regulatory capital treatment of a fund’s units, shares or interests. Once finalized,...more
Europcar Drives CDS Down a Familiar Path -
When Europcar defaulted on its debt, buyers of approximately $100 million of credit default swap (CDS) protection expected significant payouts due to the anticipated low recovery on...more
Supply-chain credit risk is a continuous risk vendors and suppliers face, and it is a risk that has some extra venom during the holiday season. With a highly distressed retail sector, suppliers are, as always, seeking to...more
In connection with the anticipated discontinuance of LIBOR and similar benchmarks, the International Swaps and Derivatives Association (ISDA) has published the 2020 IBOR Fallbacks Protocol (Protocol) to help market...more
DC Avoids Getting Its Wires Crossed With Wirecard -
Following its application to the Munich District Court to open preliminary insolvency proceedings, Wirecard was alleged to have been subject to a bankruptcy credit event....more
9/24/2020
/ CDS ,
Chapter 15 ,
Derivatives ,
Environmental Social & Governance (ESG) ,
Failure To Pay ,
Germany ,
Insolvency ,
Lufthansa ,
Original Issue Discount ,
Secured Notes ,
Wirecard
Hertz CDS Auction Attracts Unusual DC Action -
The Determinations Committee (DC) dealing with the Hertz bankruptcy credit event received a challenge from a market participant to the inclusion of certain letter of credit...more
The McClatchy Company (MNI) Mellows Out -
For a name on which $380 million was written at the time of the credit event and that had attracted some publicity in 2018, the scarcity of unsecured bonds (only around $15...more
With the continuing spread of the COVID-19 pandemic across the globe, its full implications remain unknown. For OTC derivatives market participants, COVID-19 raises a number of considerations that firms should take into...more
3/17/2020
/ Business Disruption ,
China ,
Commodities ,
Coronavirus/COVID-19 ,
Crisis Management ,
Derivatives ,
Emergency Management Plans ,
Financial Markets ,
Force Majeure Clause ,
Holidays ,
Infectious Diseases ,
Investment ,
ISDA ,
Market Participants ,
Over The Counter Derivatives (OTC) ,
Public Health ,
Valuation
Section 13 of the Bank Holding Company Act of 1956 (the BHC Act) generally prohibits any insured depository institution (as defined in Section 3(c) of the Federal Deposit Insurance Act, but excluding institutions that...more
2/12/2020
/ Bank Holding Company Act ,
Banks ,
Covered Funds ,
Debt Instruments ,
Depository Institutions ,
Derivatives ,
Dodd-Frank ,
Exclusions ,
FDIC ,
Fiduciary Duty ,
Foreign Exchanges ,
International Banks ,
Investment Adviser ,
Loans ,
Ownership Interest ,
Regulatory Requirements ,
Section 13 ,
Volcker Rule
Thomas Cook Takeaways -
For credit default swap (CDS) protection buyers with protection on Thomas Cook Group Plc, a U.K. scheme of arrangement paving the way for a £1.6 billion debt-to-equity exchange imposed on all debt...more
1/10/2020
/ Acceleration ,
CFTC ,
Chapter 15 ,
Commercial Bankruptcy ,
Contract Terms ,
Credit Default Swaps ,
Debt ,
Derivatives ,
End-Users ,
ISDA ,
Lenders ,
Liquidity ,
Popular ,
Secondary Credit Markets
ISDA has reopened the CDS NTCE Protocol prior to its effective date on Jan. 27, 2020. The Protocol will remain open for adherence until noon on Friday, Jan. 24, 2020. ...more
Thomas Cook Group Plc’s (Thomas Cook) recent attempt at a restructuring and its ultimate downfall received numerous headlines. As the world’s oldest travel company spiraled toward a liquidation, the inner workings of the...more
On Nov. 25, the Securities and Exchange Commission (SEC) voted 5-0 to propose or repropose new rules revamping the framework for permissible use of derivatives and short sales by investment companies (other than money market...more
ISDA has extended the closing date for the CDS NTCE Protocol by two weeks. The Protocol will now close on Oct. 28. This extension of the adherence period is due to the relatively modest rate of adherence so far. ...more
In a continuing effort to address the advent of narrowly tailored credit events (NTCEs) in the CDS market, ISDA is now preparing for the implementation of the changes designed to deter market participants from running these...more
In response to the increasingly aggressive activism by holders of net short positions that are in debt by way of credit default swaps, the leveraged loan market has responded with the inclusion in a recent market...more
Narrowly tailored credit events have emerged as one of the most controversial opportunistic CDS strategies in recent years, as we have been reporting in prior publications....more
The London interbank offered rate (LIBOR), the submission of which will cease to be mandated by the U.K. Financial Conduct Authority in 2021 as a result of concerns over its reliability and robustness due to its lack of...more
In July 2017, the CEO of the U.K. Financial Conduct Authority (FCA), Andrew Bailey, announced that the FCA will discontinue the London interbank offered rate (LIBOR) at the end of 2021. LIBOR is an interest rate index that is...more
On Jan. 3, 2018, the long-anticipated overhaul of European Union (EU) financial markets legislation will come into effect. The second Markets in Financial Instruments Directive (MiFID II) will broaden the scope of EU...more
On July 28, 2017, ISDA published the ISDA 2017 OTC Equity Derivatives T+2 Settlement Cycle Protocol (Protocol) which will enable participants to adjust the settlement cycle of certain of their OTC equity derivatives...more