Swaps Ruling May Complicate a Russia Default Insurance Payout
- Ruble payment on some bonds would disqualify them from auction
- Swaps indicate 82% chance of default within five years
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Roughly $13 billion of Russian government debt could be ineligible to be delivered in a credit-default swaps auction, a panel of banks and investors ruled Friday, potentially complicating hedges against a Russia default.
After three days of meetings, members of the Credit Derivatives Determinations Committee said that because of a feature in the six bonds allowing the government to make payments in rubles -- rather than the dollars or euros they were issued in -- they would be ineligible as so-called deliverable obligations.