TriOptima announces that it held compression cycles for both the subordinated and senior debt-related single name credit default swaps (CDS) of the Irish Bank Resolution Corporation Limited following a bankruptcy event on 7th February. The Resolution Corporation was created by the court-mandated merger in July 2011 of Anglo Irish Bank and the Irish Nationwide Building Society. Over 70% of the notional principal outstanding of subordinated debt-linked CDS and over 50% of the senior debt- linked CDS notional principal submitted to the cycles were compressed.
Although a default was acknowledged by the ISDA Determinations Committee, an auction pursuant to the European “Small Bang” was not scheduled. In response to industry interest, TriOptima offered compression cycles for both the senior and subordinated debt-linked CDS of the Irish Bank Resolution Corporation. Reducing the notional principal and number of trades outstanding in advance of physical settlement will contribute to an operationally smoother settlement process scheduled for later in March.
“Market participants were eager to minimize the challenges of physical settlement, and we were able to offer compression cycles within 48 hours of initial discussions,” said Vikash Rughani, business manager for triReduce. “We were pleased to be able to support this industry initiative.”
