Abengoa SA’s filing for preliminary creditor protection constitutes a bankruptcy credit event that will trigger payouts on some derivatives insuring its debt, according to the International Swaps & Derivatives Association.

ISDA’s determinations committee, a group of 15 dealers and money managers that govern the market, said that credit-default swaps on updated 2003 contracts will be triggered, according to a statement on its website. Contracts using 2014 terms won’t pay out.

The committee was asked for a ruling after the Spanish renewable energy company applied to a court in Seville for creditor protection. There were 2,478 contracts covering a net $695 million of Abengoa’s debt as of Nov. 27, according to the Depository Trust & Clearing Corp.

Abengoa is in talks with its main creditor banks for emergency funding that it may need to avoid insolvency. Before ISDA’s ruling, it cost 9.3 million euros ($10.1 million) in advance to insure 10 million euros of Abengoa’s bonds for five years, according to S&P Capital IQ’s CMA. That’s in addition to 500,000 euros annually and implies a 97 percent likelihood of default.

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