Deals
One of the Last Big Buyouts Is Now Haunting the CDS Market
- iHeartMedia triggers credit event with foregone payment
- ‘Significant’ deficiency may be seen in CDS product: Barclays
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Some 20 years after their invention, credit default swaps are still going through growing pains.
Late last month, the International Swaps and Derivatives Association ruled that the decision of iHeartMedia Inc. to forgo payment on $57.1 million of bonds due to an affiliate constituted a “Failure to Pay Credit Event.” That would trigger payouts on as much as $749 million of swaps linked to the U.S. radio broadcaster’s debt.