Ecuador CDS settlement auction sets price of 31.375 for bonds

By Angela McDaniels

Tacoma, Wash., Jan. 14 - The final price of Ecuador bonds for the purpose of settling credit derivative transactions was determined to be 31.375, according to a joint news release from Creditex and Markit.

As a result, market participants who bought protection against an Ecuador default will receive the face value of their bonds in exchange for a payment of 31.375% of par to protection sellers, the release stated.

Creditex and Markit administrated a credit event auction held Wednesday under the International Swaps and Derivatives Association, Inc.'s 2008 Ecuador credit default swap protocol. They said this was the first credit event auction run to settle CDSs referencing the debt of a sovereign nation or an emerging market credit.

As previously reported, Ecuador did not make a $30.6 million interest payment within the 30-day grace period that started after the country failed to make its payment on the original due date of Nov. 15.

In December, ISDA said that Ecuador, which also defaulted in 1999, owes about $10 billion to bondholders, multilateral lenders and other countries.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.