The International Swaps and Derivatives Association, Inc. (ISDA) today announced that it will launch a CDS auction protocol to facilitate the settlement of loan-only credit default swap (LCDS) trades referencing Sanitec, the leading European provider of bathroom solutions. This will be the first European leveraged loan credit event auction.
LCDX dealers voted today to hold an auction for loan-only CDS transactions referencing Sanitec, after the company missed interest payments on senior loans used to finance its acquisition by EQT in 2005.
ISDA will facilitate the process by publishing the Protocol and auction terms on its website www.isda.org, in due course. The Protocol will be open to ISDA members and non-members alike. The auction terms, including the auction date, will be determined by the LCDX dealers according to the LCDS Auction Rules published on ISDA’s website. The auction will be administered by Markit and Creditex.