For Immediate Release Monday, June 13, 2005
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ISDA Publishes
Template for Credit Default Swaps on
Asset-Backed
Securities;
Announces CDS
Protocol Adherents
NEW YORK, Monday, June 13, 2005 – The
International Swaps and Derivatives Association (ISDA) has announced
publication of a template for documenting trades of credit default swaps on
asset-backed securities (CDS on ABS) intended for cash or physical settlement.
A second template for use with CDS on ABS with a pay-as-you-go (PAUG)
settlement approach will be published later this month.
ISDA
has also announced that over 450 firms have signed up for its protocol,
launched May 26, 2005, addressing settlement of CDS index trades referencing
obligations in Collins & Aikman, the bankrupt U.S. auto parts supplier. The
protocol enables parties to amend such trades from a physical to a cash
settlement mechanism. The settlement price will be established by auction of
Collins & Aikman 2011 bonds tomorrow, June 14.
“The continuing growth in the size and product range of credit derivatives is
opening up this important asset class to an ever broader range of investors,
thereby disaggregating credit risk throughout the financial system,” said
Robert Pickel, Chief Executive Officer and Executive Director, ISDA. “Providing robust legal and documentation
solutions to support this evolution is fundamental to our mission.”
About ISDA
ISDA
is the global trade association representing leading participants in the
privately negotiated derivatives industry. ISDA was chartered in 1985, and
today has more than 625 member institutions from 47 countries on six
continents. These members include most of the world's major institutions that
deal in privately negotiated derivatives, as well as many of the businesses,
governmental entities and other end users that rely on over-the-counter
derivatives to manage efficiently the financial market risks inherent in their
core economic activities. Information about ISDA and its activities is
available on the Association's web site: www.isda.org.