MidnightWatcher – Prophecy in Motion

“The International Swaps and Derivatives Association (ISDA) has decided unanimously today to declare that Greek’s bond swap constitutes a ‘credit event’ and that ‘the right of all holders of the affected Bonds to receive payments has been reduced,’ according to release published by the ASDA late Friday.

Investors that bought Credit Default Swaps (CDS) on Greek debt will get paid. Nevertheless, ISDA Committee will Meet again to discuss Greek credit event on Monday according to Dow Jones.

ISDA has resolved to hold an auction with respect to the settlement of standard credit default swaps that will take place on March 19, 2012. Maximum amount will be $3.16 billion of net outstanding Greek credit default swap contracts but exact amount of money will be determined by the auction.

ISDA follows Rating agencies steps, SP was said last week that Greece was in selective default while earlier on Friday, Fitch Ratings downgraded Greece to ‘restricted default’, as expected. This decision comes after Greece completed the bond swap deal with its private creditors on Thursday with a 85.8% participation.” Read more.

Moody’s: Greece has defaulted – “Moody’s Investors Service considers Greece to have defaulted per its default definitions. The announcement comes despite Athens reaching a deal with private creditors for a bond exchange that will shave €107 billion from its €350 billion debt. The agency pointed out that even though 85.8 per cent of the holders of Greek-law bonds had signed to the deal, the exercise of collective action clauses that Athens is applying to its bonds will force the remaining bondholders to participate. Eventually, the overall cost to bondholders, based on the present net value of the debt, will be at least 70 per cent of the investment, Moody’s explained. ‘According to Moody’s definitions, this exchange represents a ‘distressed exchange,’ and therefore a debt default,’ the US rating firm said.” Read more.