The EMEA Credit Derivatives Determination Committee (CDDC) ruled on Monday that a bankruptcy credit event had not occurred in relation to Credit Suisse, quashing investors’ efforts to trigger a payout on credit insurance linked to the Swiss lender.
The DC reviewed the public information submitted with the question and decided that such information did not confirm that a Credit Event had occurred. Credit Suisse was not part of the convened committee regarding the question that was posed to the committee as the bank abstained under the committee’s rules.
Hundreds of lawsuits have been filed over terms of the emergency deal to save Credit Suisse, which was hammered out over a March weekend amid turmoil in the global banking sector. The amount of gross notional outstanding CDS linked to Credit Suisse bonds stood at more than $19 billion in March, according to Depository Trust & Clearing Corporation data.
The ruling was a major setback for investors who had hoped to secure a payout on the credit default swaps (CDS) linked to Credit Suisse debt. A payout on the instrument that insures investor’s exposure against default of a company or country only triggers if the committee rules that a credit event has happened.