ISDA reviews Aiful debt dispute

12/7/2009 | Bloomberg · Euromoney magazine (London)

The International Swaps and Derivatives Association is reviewing definitions governing credit default swaps because of an impasse over Aiful Corp. swaps. At issue is whether Japan's alternative dispute-resolution process qualifies as a credit event that would lead to payouts on swaps. "If ISDA clarifies that going into ADR constitutes a credit event, that would make it much easier for credit default swap buyers to trigger credit events," said Junichi Shimizu, a credit analyst at Deutsche Bank. One expert says failure to reach an agreement quickly could damage confidence in Japan's market for the contracts.

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Bloomberg · Euromoney magazine (London)

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