Another failed Icelandic bank, Glitnir, has seen its senior debt settled at 3% and subordinated debt at 0.125% in a credit event auction today.
In an auction to cash-settle credit default swaps (CDSs) tied to Icelandic bank Landsbanki, recovery rates on its senior and subordinated debt were set at 1.25% and 0.125% today, respectively.
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A final value of 8.625% was set on the bonds of Lehman Brothers today, in an auction intended to cash-settle credit default swap (CDS) trades linked to the toppled dealer.
The International Swaps and Derivatives Association on Wednesday confirmed that the Icelandic government’s takeover of Landsbanki on October 7 and its acquisition of a 75% stake in Glitnir Bank on September 29 constitute technical credit events.
The injection on Monday of €600 million from the Icelandic government to acquire 75% of Glitnir Bank has done nothing to ease fears over the bank’s future. Glitnir’s five-year credit default swap (CDS) spreads are now the highest of any European...
Credit default swaps (CDSs) on a number of major dealers widened yesterday in spite of the US Senate vote on a revised $700 billion financial rescue plan.