A panel overseeing credit default swaps said that the Credit Suisse Additional Tier-1 wipeout will not trigger an insurance payout.
Credit Suisse’s Additional Tier-1 wipeout will not lead to default swap payouts, according to a statement by the Credit Derivatives Determinations Committee (CDDC), taking the view that the AT1 securities were junior to the subordinated bonds underlying the swaps.
The decision was made by a panel of 11 members which include Bank of America, Barclays, BNP Paribas, Citigroup, Deutsche Bank, Goldman Sachs Group, JPMorgan Chase, Mizuho Securities, Elliott, Citadel and Pacific Investment Management Company.
The dismissed question about the payouts was submitted by a market participant that referenced an underlying obligation from a sterling-denominated bond issued 23 years ago which matured in 2020.
