Wednesday, September 3, 2014

Auction values Argentina Credit Debt Swaps at 39.5 cents on dollar

Traders taking part in an auction to settle Argentina's credit default swaps (CDS) have valued the country's restructured bonds at 39.5 cents to the dollar, in line with analyst expectations, who forecasted a value around 40 cents.

The International Swaps and Derivatives Association (ISDA) carried out the action, intended to set an insurance payment value for bonds defaulted on July 30, and the results were published in the Creditex and Markit websites.

This means that for ISDA the Argentine government should pay CDS holders 39.50 dollars for every US$100 in restructured bonds, while insurance companies should pay the rest US$60.50.

ISDA considered Argentina incurred in a "credit event" on July 30, when the South American country could not fulfill payment to some exchange bondholders due to a sentence by a New York district judge who favored holdouts that sued for full payment on their bonds, triggering the CDS auctio