The International Swaps and Derivatives Association named the banks and asset managers that will decide over the next year if credit events have occurred that require auctions in the credit-default swap market.
The committees are divided into five regions and include 12 dealer banks and six asset managers, the New York-based trade and industry group said today in an e-mailed statement. When a company or country defaults on its debt, an ISDA-sanctioned auction is held to determine the price of the underlying bonds. The credit-default swaps tied to that debt then make the holders of the debt whole to 100 cents on the dollar.
Earlier this month, it was determined by an ISDA committee that sellers of credit swaps on Greece would have to pay as much as $2.5 billion to settle contracts triggered by the nation’s debt restructuring. The settlement was determined after dealers agreed a final value for Greek bonds of 21.5 percent of face value at an auction, according to administrators Markit Group Ltd. and Creditex Group Inc.
The banks with voting power in the committees for all regions are Bank of America Corp., Barclays Plc, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and UBS AG, ISDA said. Nomura Holdings Inc. will act as a consultant to the group and won’t have voting power, ISDA said.
The asset managers with voting rights are Citadel LLC, D.E. Shaw & Co., BlueMountain Capital Management LLC, Pacific Investment Management Co., and Elliot Management Corp., ISDA said. The consultative non-dealer will be MetLife Inc.
The members begin their term effective April 30, ISDA said.