Brussels, 20/03/2012 (Agence Europe) - ISDA, the international umbrella body for derivatives, reported yesterday that holders of credit default swaps for Greek debt would be receiving €1.9 billion in compensation. For a US$100 of CDS, payment of US$78.5 will be made.
The retroactive activation by the Greek government of special legislation to force reluctant private lenders to agree to the Greek bond write-down has led ISDA to decree that the write-down was not voluntary and was, in fact, a credit event. Although the identity of the banks that will have to provide the CDS payout is not known, the scale of the payout is not large enough to cause any bankruptcies. The Greek write-down will reduce the country's debt from 162% of GDP to 117% by writing off €107 billion. (MB/transl.fl)