The International Swaps and Derivatives Association, Inc. (ISDA) today announced its intention to gather and publish on its website a list of obligations for which a monoline insurer is the reference entity.
The purpose of the list is to provide information as to the range of obligations that market participants believe may be delivered in the occurrence of a credit event. ISDA members have noted that, in the current financial environment, and given the potential size of this information-gathering exercise, it is prudent for ISDA to ensure that if a credit event occurs in respect of a widely traded reference entity, ISDA and market participants are prepared to implement a settlement auction or other mechanism that will serve the market’s needs.
Publication of the list does not indicate that ISDA believes that such a credit event with respect to any particular entity or class of entities is imminent or likely.
Dealers that are CDX market makers may contribute information directly to ISDA. Other parties are encouraged to contribute through one of those dealers. ISDA will update the list regularly. Answers to frequently asked questions are available at http://www.isda.org/.