The International Swaps and Derivatives Association, Inc. (ISDA) today announced the launch of protocols to settle credit default swaps (CDS) referencing Landsbanki Islands hf, Glitnir Banki hf and Kaupping Banki hf.
The purpose of the protocols is to offer market participants an efficient mechanism to settle credit derivative transactions referencing Landsbanki Islands hf, Glitnir Banki hf and Kaupping Banki hf.
“These are the first credit events to occur in the European market since ISDA started publishing Protocols for settlement,” said David Geen, general counsel, ISDA. “The experience of running these protocols successfully for over a dozen North American credit events will be of enormous benefit in ensuring that the process runs equally smoothly in Europe.”
The protocols, which are open until October 31, offer institutions the ability to amend their documentation for various credit derivatives transactions in order to utilize auctions scheduled for November 4, 5 and 6, 2008 (for Landsbanki, Glitnir and Kaupping respectively) to determine the final price for certain obligations of those entities. Markit and Creditex will administer the auctions.
The Protocols are open to ISDA members and non-members alike.
A complete list of deliverable obligations that are included in each protocol and a list of adherents to date are available at www.isda.org. The text of each protocol and form of adherence letter, guidance on the mechanics of the protocol, and answers to frequently asked questions are also available on the Association’s website. Details on the auction are included in the protocol.