ISDA®
INTERNATIONAL
SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate Release, Thursday, October 16, 2008
For More Information, Please Contact:
Louise Marshall, ISDA New York, +1 212-901-6014, lmarshall@isda.org
Cesaltine Gregorio, ISDA New York, +1 212-901-6019,
cgregorio@isda.org
Donna Chan, ISDA Hong Kong, +852 2200 5906, dchan@isda.org
SUCCESS OF ISDA SETTLEMENT PROTOCOL SERIES CONTINUES, ISDA LAUNCHES
WASHINGTON MUTUAL PROTOCOL
NEW YORK, Thursday, October 16, 2008 – The International Swaps and Derivatives Association, Inc. (ISDA) today continues its successful series of credit default swap settlement (CDS) protocols with the launch of the 2008 Washington Mutual CDS Protocol.
The protocol
mechanism, which facilitates industry-wide net settlement of credit default
swaps, was most recently used to settle CDS on Lehman Brothers Holdings. Over
350 organizations adhered to ISDA’s
2008 Lehman CDS Protocol, which provided a
seamless settlement procedure for approximately $6bn of net CDS
exposures.* On Friday, October 10, ISDA
held a press briefing to discuss the protocol and auction in the context
of other market developments. An audio link to the conference call is available
at http://www.isda.org/press/audio/6855060.mp3.
“The success of ISDA’s protocol and auction process
demonstrates a fundamentally important point about our business,” said Robert
Pickel, Executive Director and Chief Executive Officer, ISDA. “Our industry,
working through ISDA, has invested a significant amount of human and financial
resources to build a robust framework and infrastructure for the privately
negotiated derivatives business. The framework works and is helping the financial industry to negotiate the
difficult economic times that have resulted from subprime lending issues.”
The
purpose of the Washington Mutual CDS Protocol is to offer market participants
an efficient way to settle credit derivative transactions referencing
Washington Mutual Inc, the WaMu holding company that
filed for Chapter 11 Bankruptcy Protection on September 26, 2008. The Protocol,
which is open until October 20, offers institutions the ability to amend their
documentation for various credit derivatives transactions in order to utilize an
auction scheduled for October 23, 2008 to determine the final price for certain
Washington Mutual obligations. Markit and Creditex will administer the auction.
The 2008 Washington Mutual CDS Protocol is open to ISDA members and non-members alike.
A list of adherents to date
are available at www.isda.org.
The text of the Protocol and form of adherence letter, guidance on the mechanics
of the Protocol, and answers to frequently asked questions are also available
on the Association’s website. Details on the auction are included in the
Protocol.
In addition to Washington Mutual
and Lehman Brothers, ISDA’s protocol and auction process resulted in a
seamless settlement procedure for the outstanding CDS trades on Tembec and
Fannie Mae and Freddie Mac. ISDA expects to implement similar processes for Landsbanki
Islands hf, Glitnir Banki hf and Kaupþing
Banki hf in the coming weeks.
* As stated by The
Depository Trust and Clearing Corporation (DTCC) on
October 11, 2008.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has approximately 850 member institutions from 56 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.
®ISDA is a registered trademark of the
International Swaps & Derivatives Association, Inc.