Argentina Credit-Default Swaps Auction Date Delayed, ISDA Says

The International Swaps & Derivatives Association said an auction to settle more than $800 million of swaps bets on Argentina’s default is delayed amid a challenge to the bonds that can determine the payout price.

A panel of credit-default swaps dealers and investors governing the market pushed out the auction date to Sept. 2 from tomorrow, according to a statement on ISDA’s website. They received a challenge to two yen-denominated bonds that were on a list to be included in the process.

The group ruled earlier this month that a failure-to-pay credit event had occurred that would trigger settlement of the swaps. An interest payment made by Argentina to the bond trustee was not passed on to noteholders before a July 30 deadline. That followed a court ruling barring the transfer of money until a dispute with hedge funds led by Elliott Management Corp. is resolved.

The auction process sets a value for the defaulted bonds, which is then used to determine payouts for swaps holders.

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To contact the editors responsible for this story: Shannon D. Harrington at Caroline Salas Gage, Mitchell Martin

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