CDS tested to the limit
Auctions to settle credit default swaps on media firm Thomson in October tested both the small bang protocol and the nerves of dealers. The outcome puzzled some market participants, while others have called for the removal of restructuring as a credit event altogether. Mark Pengelly reports
Never before has the restructuring of a French media firm caused so much trouble for dealers. On June 15, Paris-based Thomson announced it had entered into a waiver and forbearance agreement with investors to defer payment of principal on its 6.05% senior notes, later declaring on July 24 it had signed a restructuring agreement with the majority of senior creditors. In the credit derivatives market, the agreement presented an immediate test for the small bang protocol, which came into effect on
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