Low recovery rates set for Ferretti LCDS

Because the auction procedure is not hardwired in the standard CDS contract, protocols are required to cash settle CDS and LCDS trades. The company breached its loan agreements with the Royal Bank of Scotland, triggering a credit event.

This was the third-ever cash settlement auction held on European LCDS.

See also: Auction fixes low recovery rates for Smurfit-Stone CDS
Auctions held for CDSs referencing Nortel Networks
Auction sets values on British Vita LCDS

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