Creditex and Markit, in partnership with other credit derivative dealers, announce the results of Credit Event Auctions conducted to facilitate settlement of credit derivative trades referencing Tribune Company bonds and loans.
It’s the first time that auctions were run to settle both credit default swaps (CDS) and loan-only credit default swaps (LCDS) contracts in connection with a single reference entity default.
The final price of Tribune bonds was determined to be 1.5% for the purpose of settling credit derivative transactions. The final price of Tribune loans was determined to be 23.75% for the purpose of settling loan-only credit derivative transactions.
Creditex and Markit are the official administrators of Credit Event Auctions, which enable market participants to cash settle credit derivative transactions. During a Credit Event Auction, dealers submit orders electronically on the Creditex platform. The auction submissions are delivered to Markit electronically. Markit calculates and verifies the results.
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