PDVSA, Venezuela's state oil company, may have its credit default swaps triggered now that a credit event determination question has been submitted to the International Swaps and Derivatives Association (ISDA). The question submitted to the credit derivatives determinations committee asked whether a “failure to pay” event had occurred, based on the possibility that a three-day CDS grace period had expired on its so-called 2017N bonds without payment being received.
RK&O partner Vincent Basulto discusses in REDD that PDVSA's situation is, "Reputationally it’s not desirable... But in these circumstances that’s probably not that big a concern. The reference entity, [PDVSA], isn’t a party to the contract.”
To read the full article please click here. (Subscription Required)