NEW YORK ¡ª Credit-default swaps traders in Tokyo will meet next week to discuss whether private corporate debt restructuring talks, which roiled contracts protecting against a default by Aiful Corp., should trigger payouts to swaps buyers.
The International Swaps and Derivatives Association said Wednesday that the group is assessing whether Japan¡¯s alternative dispute resolution process for companies restructuring their debt triggers a so-called credit event that would lead to payouts. ISDA will hold a forum for members and counsel next week to ¡°discuss views¡± on the matter, ISDA General Counsel David Geen said Thursday.
The review was triggered by a dispute surrounding credit swaps on Aiful. After the Kyoto-based consumer lender entered alternative dispute resolution talks in September, a committee of 15 dealers and investors that determines when the swaps are triggered rejected three attempts to get payouts from contracts on the company¡¯s debt even as one bank said Aiful ceased making loan payments.
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