Bloomberg: Sellers of credit-default swaps on Greece will have to pay as much as $2.5 billion to settle contracts triggered by the nation’s debt restructuring.Yes, the $2.5 billion number represents the Par less Recovery amount on the $3.2 bn net CDS outstanding. As predicted, it's a non-event, particularly given the number of participants involved. Some corporate defaults have resulted in far larger CDS settlements - and nobody died. The recovery lock sellers got hurt a bit. Locks were traded at 24 a few days back and will now settle against 21.5. But that's the nature of the beast.
The settlement was determined after dealers agreed a final value for Greek bonds of 21.5 percent of face value at an auction, according to administrators Markit Group Ltd. and Creditex Group Inc., and is in line with where the notes have been trading.
|Source: The Telegraph|