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Elpida Default-Swap Holders to Recover 79 Percent on Debt

Sellers of credit-default swaps on Elpida Memory Inc. (6665)’s bonds will have to pay 79 percent of the notes’ face value to settle contracts triggered by the manufacturer’s bankruptcy filing.

The settlement was determined after dealers agreed to the final value for Elpida bonds of 21 percent at an auction today, according to administrators Markit Group Ltd. and Creditex Group Inc.

The chipmaker filed for Japan’s biggest bankruptcy by a manufacturer after it was cut to the lowest investment grade by Japan Credit Rating Agency Ltd. The country’s last major maker of DRAM computer-memory chips cited a stronger yen as a reason for its failure, it said in a statement on Feb. 27, when it filed for protection at the Tokyo District Court.

Elpida’s 0.5 percent convertible bond maturing October 2015 was at 14 yen per 100 face value today, according to prices from Barclays Plc. The bonds have plunged from 74 on Feb. 27.

To contact the reporter on this story: Yusuke Miyazawa in Tokyo at ymiyazawa3@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net

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