iHeart CDS saga sparks debate over credit rules
Trigger decision highlights product's weaknesses, warns Milbank’s Williams
Lawyers have raised concerns about potential weaknesses in credit default swaps (CDS) as a result of the decision to trigger iHeart Communications’ contract in January.
The International Swaps and Derivatives Association’s Americas Credit Derivatives Determinations Committee (DC) declared a failure-to-pay trigger event had occurred on the San Antonio-based radio broadcaster’s CDS on December 21 – despite the arguments of some lawyers – after it repaid notes held by outside investors but didn’t
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