Greece's 'credit event' triggers $3.2 billion payouts

The International Swaps and Derivatives Association (ISDA) said Friday
that the Greek government's use of collective-action clauses, or CACs,
to amend to terms of Greece-issued bonds qualifies as a "credit event"
for Greece. A credit event requires a payout to those who held credit
default swaps (CDS) as insurance to protect themselves in the event of
a Greek default.

The ISDA decision could trigger payouts on $3.2 billion of those
insurance-like contracts, according to Dow Jones Newswires. The news
comes after the Greek government announced that 83.5% of its
private-sector bondholders agreed to a bond-swap deal. That rate fell
short of the 90% needed to prevent legal force to get the rest of the
private bondholders to participate, so Greece's finance ministry said
it got approval for CACs, which would bring the total participation
rate to 96% by forcing some bondholders on board.