TXU has not triggered a credit event, rules Isda

The Isda credit derivative determinations committee voted yesterday that a credit event has not occurred on TXU. Hedge fund Aurelius Capital had posed the question, arguing that reference entity Texas Competitive has triggered a bankruptcy credit event. Although there has been no bankruptcy filing by any TXU company, the credit derivative definition of bankruptcy includes a clause referring to insolvency. The hedge fund argued that TXU has triggered a bankruptcy under this definition.
The Isda committee give no immediate explanation for its decision, but is expected to expand on its ruling in a statement later today.