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CDS Dealers Rule Sino-Forest Not in ‘Credit Event,’ ISDA Says

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Jan. 5 (Bloomberg) -- Dealers and investors ruled that a bankruptcy credit event that would trigger default swaps on Sino-Forest Corp.’s debt hasn’t occurred, the International Swaps & Derivatives Association said on its website.

ISDA’s determinations committee for Asia excluding Japan previously declined a Dec. 19 request to decide whether a so-called failure-to-pay credit event occurred, ISDA said.

Sino-Forest received notices of default on Dec. 16 on senior notes due 2014 and 2017 after failing to publish its third-quarter financial results in a “timely manner,” according to a statement from the company two days later.

Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

To contact the reporter on this story: Abigail Moses in London at amoses5@bloomberg.net

To contact the editor responsible for this story: Paul Armstrong at parmstrong10@bloomberg.net

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