The International Swaps and Derivatives Association, Inc. (ISDA) today announced that it will launch a CDS auction protocol to facilitate the settlement of credit derivatives trades referencing Smurfit-Stone Consolidated Enterprises Inc., the Chicago-based leading integrated containerboard and corrugated packaging producer.
Smurfit-Stone announced today that it and its US and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the US Bankruptcy Court in Wilmington, Delaware. The Canadian subsidiaries will also file to reorganize under the Companies’ Creditors Arrangement Act (CCAA) in the Ontario Superior Court of Justice in Canada.
In addition, LCDX dealers are expected to vote shortly on whether to hold an auction for loan-only CDS transactions referencing Smurfit-Stone. If those firms vote to hold an auction, ISDA will publish auction terms for this auction, similar to the documentation for the recent Tribune loan-only CDS auction that took place late last year.
The Protocol will be open to ISDA members and non-members alike. ISDA will publish further details in due course and these will be available at www.isda.org.