In case anyone thought that the $3BN or so credit event was the end of the matter for Greece, I recommend that you take a look at ISDA's list of Preliminary Greek Deliverable Obligations.
ISDA list Greek guarantees/debts (over and above the Euro130BN bailout) that exceeds $100BN, and are technically repayable immediately now that Greece has defaulted on its bonds.
Showing posts with label isda. Show all posts
Showing posts with label isda. Show all posts
Monday, March 12, 2012
Saturday, March 10, 2012
ISDA Confirms Greece Has Defaulted
After seven hours of deliberation, ISDA has finally reached a unanimous decision that the Greek bond swap represents a default; thereby triggering CDS insurance totalling $3.5BN.
Why waste seven hours discussing what was obvious to everyone else?
They could have saved time by simply reading my article yesterday!
Why waste seven hours discussing what was obvious to everyone else?
They could have saved time by simply reading my article yesterday!
Friday, March 9, 2012
Greece Defaults
As expected, the "voluntary" take up of new Greek bonds for old has not reached the 90% threshold necessary for it to be considered "voluntary".
85% of Greek holders of bonds (bound by Greek law) agreed to the deal (ironically the Greek Finance Ministry employees' pension fund was among those that did not agree to a "voluntary" participation), whilst only 69% of non-Greek debt (bound by English law) participated. Needless to say Greece has attempted to move the goalposts on the latter, by extending the period for participation to March 23 (yesterday they denied that they would do this).
Whatever the fiddles and fudges that Greece now attempts, the fact remains that the 90% threshold has not been reached and that CACs will have to be used; ie Greece has defaulted.
For form's sake Isda has announced that its determinations committee will meet at 1pm GMT today, to discuss a potential credit event in Greek CDS.
After that the whole process will be mired in litigation.
Oh, and by the way, does anyone really believe the figures announced by Greece?
Only when they are fully audited by a genuinely independent person/organisation may we have any real faith in the numbers.
Here is a link to the full press release from the Hellenic Republic Ministry of Finance (for what it is worth).
85% of Greek holders of bonds (bound by Greek law) agreed to the deal (ironically the Greek Finance Ministry employees' pension fund was among those that did not agree to a "voluntary" participation), whilst only 69% of non-Greek debt (bound by English law) participated. Needless to say Greece has attempted to move the goalposts on the latter, by extending the period for participation to March 23 (yesterday they denied that they would do this).
Whatever the fiddles and fudges that Greece now attempts, the fact remains that the 90% threshold has not been reached and that CACs will have to be used; ie Greece has defaulted.
For form's sake Isda has announced that its determinations committee will meet at 1pm GMT today, to discuss a potential credit event in Greek CDS.
After that the whole process will be mired in litigation.
Oh, and by the way, does anyone really believe the figures announced by Greece?
Only when they are fully audited by a genuinely independent person/organisation may we have any real faith in the numbers.
Here is a link to the full press release from the Hellenic Republic Ministry of Finance (for what it is worth).
Thursday, March 1, 2012
Beware The ISDA of March
Following this morning's meeting, ISDA has announced that CDSs on Greek bonds have not been triggered, ie there is no credit event....yet.
However, ISDA has also stated that its decision may change as PSI progresses.
One might ask how it is that a 75% haircut is not a credit event, and has ISDA taken leave of its collective senses?
The answer is that we will have to wait until the CACs are used, before determining whether ISDA has taken leave of its senses (ie CACs will be th trigger).
Here is their statement in full:
EMEA Determinations Committee Statement March 1, 2012
In light of today’s EMEA Determinations Committee (EMEA DC) unanimous decisions in respect of the two potential Credit Event questions relating to the Hellenic Republic (DC Issue 2012022401 and DC issue 2012022901), the EMEA DC has agreed to publish the following statement:
The first submitted question (DC Issue 2012022401) asked whether the holders of Greek law bonds had been subordinated to the ECB and certain NCBs whose bonds were acquired by the Hellenic Republic prior to the implementation of new Greek legislation such that such subordination constitutes a Restructuring Credit Event. (The full text of the question is available here http://www.isda.org/dc/view.asp?issuenum=2012022401.)
The EMEA DC unanimously determined that the specific fact pattern referred to in the first submitted question does not satisfy either limb of the definition of Subordination as set out in the ISDA 2003 Credit Derivatives Definitions (the 2003 Definitions) and therefore a Restructuring Credit Event has not occurred under Section 4.7(a) of the 2003 Definitions.
The second submitted question (DC Issue 2012022901) asked whether there had been any agreement between the Hellenic Republic and the holders of private Greek debt which constitutes a Restructuring Credit Event. (The full text of the question is available here http://www.isda.org/dc/view.asp?issuenum=2012022901.)
The EMEA DC determined that it had not received any evidence of an agreement which meets the requirements of Section 4.7(a) of the 2003 Definitions and therefore based on the facts available to it, the EMEA DC unanimously determined that a Restructuring Credit Event has not occurred under Section 4.7(a) of the 2003 Definitions.
The EMEA DC noted, however, that the situation in the Hellenic Republic is still evolving and today’s EMEA DC decisions do not affect the right or ability of market participants to submit further questions to the EMEA DC relating to the Hellenic Republic nor is it an expression of the EMEA DC’s view as to whether a Credit Event could occur at a later date, in each case, as further facts come to light.
However, ISDA has also stated that its decision may change as PSI progresses.
One might ask how it is that a 75% haircut is not a credit event, and has ISDA taken leave of its collective senses?
The answer is that we will have to wait until the CACs are used, before determining whether ISDA has taken leave of its senses (ie CACs will be th trigger).
Here is their statement in full:
EMEA Determinations Committee Statement March 1, 2012
In light of today’s EMEA Determinations Committee (EMEA DC) unanimous decisions in respect of the two potential Credit Event questions relating to the Hellenic Republic (DC Issue 2012022401 and DC issue 2012022901), the EMEA DC has agreed to publish the following statement:
The first submitted question (DC Issue 2012022401) asked whether the holders of Greek law bonds had been subordinated to the ECB and certain NCBs whose bonds were acquired by the Hellenic Republic prior to the implementation of new Greek legislation such that such subordination constitutes a Restructuring Credit Event. (The full text of the question is available here http://www.isda.org/dc/view.asp?issuenum=2012022401.)
The EMEA DC unanimously determined that the specific fact pattern referred to in the first submitted question does not satisfy either limb of the definition of Subordination as set out in the ISDA 2003 Credit Derivatives Definitions (the 2003 Definitions) and therefore a Restructuring Credit Event has not occurred under Section 4.7(a) of the 2003 Definitions.
The second submitted question (DC Issue 2012022901) asked whether there had been any agreement between the Hellenic Republic and the holders of private Greek debt which constitutes a Restructuring Credit Event. (The full text of the question is available here http://www.isda.org/dc/view.asp?issuenum=2012022901.)
The EMEA DC determined that it had not received any evidence of an agreement which meets the requirements of Section 4.7(a) of the 2003 Definitions and therefore based on the facts available to it, the EMEA DC unanimously determined that a Restructuring Credit Event has not occurred under Section 4.7(a) of the 2003 Definitions.
The EMEA DC noted, however, that the situation in the Hellenic Republic is still evolving and today’s EMEA DC decisions do not affect the right or ability of market participants to submit further questions to the EMEA DC relating to the Hellenic Republic nor is it an expression of the EMEA DC’s view as to whether a Credit Event could occur at a later date, in each case, as further facts come to light.
CDS and The "Secret" ISDA Committee
The "secret" committee of the International Swaps and Derivatives Association (ISDA) will meet today, to decide if the Greek haircut constitutes a credit event which would trigger credit default swap contracts (CDS).
Who are on the "secret" committee?
These guys:
ISDA Determinations Committees (effective 30 November 2011)
Americas
Voting Dealers
Bank of America / Merrill Lynch
Barclays
Citibank
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
BNP Paribas
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Asia Ex-Japan
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Citibank
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
The Royal Bank of Scotland
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Australia and New Zealand
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
EMEA
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
Citibank
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Japan
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Mizuho
Morgan Stanley
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Who are on the "secret" committee?
These guys:
ISDA Determinations Committees (effective 30 November 2011)
Americas
Voting Dealers
Bank of America / Merrill Lynch
Barclays
Citibank
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
BNP Paribas
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Asia Ex-Japan
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Citibank
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
The Royal Bank of Scotland
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Australia and New Zealand
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
EMEA
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Morgan Stanley
Société Générale
UBS
Consultative Dealers
Citibank
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
Japan
Voting Dealers
Bank of America / Merrill Lynch
Barclays
BNP Paribas
Credit Suisse
Deutsche Bank
Goldman Sachs
JPMorgan Chase Bank, N.A.
Mizuho
Morgan Stanley
UBS
Consultative Dealers
Nomura
The Royal Bank of Scotland
Voting Non-dealers
BlueMountain Capital (Second Term Non-dealer)
Citadel LLC(First Term Non-dealer)
D.E. Shaw Group (First Term Non-dealer)
Elliott Management Corporation (Third Term Non-dealer)
Pacific Investment Management Co., LLC (Second Term Non-dealer)
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