The International Swaps and Derivatives Association, Inc. (ISDA) today announced that Markit iTraxx LevX Market Makers voted to hold an auction for European loan-only CDS transactions referencing certain Loans of Ferretti SpA, the Italian maker of luxury yachts.
In accordance with the ELCDS Auction Rules, published on ISDA’s website, the Markit iTraxx LevX Market Makers have determined that the Reference Entities (which in relation to the Loans entered into pursuant to the Senior and Second Lien Facilities Agreement, includes Ferretti S.p.A and Sestante 3 S.p.A and in relation to Loans entered into pursuant to the Mezzanine Facility Agreement, includes Sestante 2 S.À.R.L.) have failed to make payments due on some or all of the Loans (also listed on the Markit Database) and have voted to hold an auction for ELCDS transactions referencing any Loans which would constitute Reference Obligations either pursuant to the LevX Senior or Subordinate Indices.
ISDA will facilitate the process by publishing the auction terms on its website www.isda.org, in due course. The auction terms, including the auction date, will be determined by the Markit iTraxx LevX Market Makers according to the ELCDS Auction Rules. The auction will be administered by Markit and Creditex.
The auction terms will set out a settlement mechanism similar to that used to settle recent credit events including Sanitec and British Vita. Following the publication of the ISDA 2009 European Loan CDS Protocol, the auction mechanism is already built into the relevant ISDAs standard loan-only CDS documentation as between parties that adhered to that Protocol, therefore no further protocol will be published.
