Barclays disputes CDS committee decision ahead of auction
Representing the bank, law firm Milbank argues the committee’s approach risks constraining the market and goes against expectations
Barclays has challenged the committee that adjudicates on credit derivatives defaults on its decision to disqualify debt from next week’s auction to decide payouts on contracts linked to beauty brand Avon.
The determinations committee (DC), composed of banks and investors active in credit default swap (CDS) markets, had decided to exclude Avon’s $405 million promissory note to an affiliate of its Brazilian parent company Natura from delivery into Tuesday’s (September 24) default auction. Barclays
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