Final price for Hawaiian Telcom loans determined at 40.125% in auction event

By Jennifer Chiou

New York, Dec. 17 - Markit and Creditex, in partnership with 10 major credit derivative dealers, announced the results of a credit event auction that determined a price of 40.125% to facilitate settlement of credit derivative trades referencing the first-lien loans of Hawaiian Telcom Communications, Inc.

The final price of the loans was determined at 2 p.m. ET on Wednesday.

On Dec. 1, the International Swaps and Derivatives Association, Inc. announced that LCDX dealers had voted to hold an auction for loan-only credit default swap transactions referencing Hawaiian Telcom, which filed for Chapter 11 bankruptcy protection.

The auction terms were used to set out a settlement mechanism similar to that used to settle recent credit events, including Lehman Brothers Holdings Inc. and Washington Mutual, Inc. But unlike those credit events, the auction mechanism is already built into ISDA's standard loan-only CDS documentation.

Markit previously noted that the company is a constituent of LCDX series 8, 9 and 10 and that the designated priority of the underlying obligations of Hawaiian Telcom is first lien.

Hawaiian Telcom is a telecommunications company based in Honolulu.

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