Dealers split on Japan Airlines auction

Dealers have ruled out holding a credit settlement auction for bankrupt Japan Airlines. The Isda credit derivatives determinations committee for Japan confirmed today that a bankruptcy credit event has occurred on Japan Airlines, after the national carrier filed to start corporate reorganisation proceedings with the Tokyo district court on Tuesday (19 January).

The 15 dealers and buy-side firms on the committee ruled unanimously that a bankruptcy credit event has taken place, but were split on whether or not to hold an auction to decide the value of the borrower’s deliverables. While Deutsche Bank, Goldman Sachs, JP Morgan and Legal & General voted in favour of an auction, the other members – Bank of America Merrill Lynch, Barclays, Citi, Credit Suisse, Mizuho, Morgan Stanley, UBS, Elliott Management, Pimco, Primus Asset Management and Rabobank – voted against.