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Russia Fails to Meet Bond Obligations, Triggering Swaps Payout
Russia was judged to have breached the terms on a bond payment by a derivatives panel, triggering an insurance payout potentially worth billions of dollars. The Credit Derivatives Determinations Committee said a “failure-to-pay” event occurred on credit-default swaps because Russia didn’t include $1.9 million of additional interest in a late bond payment made at the start of last month. While a comparatively small amount, the missed interest will trigger all of Russia’s outstanding credit default swaps, entailing a payout on as much as $3.2 billion of debt, with the final amount likely to be set at auction. ... (full story)