Isda drops external review after publisher fails to meet coupon deadline

Isda’s credit derivatives determinations committee has dropped its plan to submit a controversial credit event decision to external review. The committee had failed to reach a decision on whether Seat Paginegialle had triggered a credit event by missing a bond coupon on 31 October. That question had centred on what grace period was relevant for the coupon payment – the 30-day period under the bond documents or a much shorter three-day period for a loan to the note-issuing special purpose vehicle.

Isda has now issued a separate ruling that the Italian publisher has triggered a credit event. That is based on the much more straightforward 30-day grace period of the bond, which has now elapsed. Yesterday, the committee ruled unanimously that a default has taken place on this basis. It also resolved to shelve the more contentious question on the failure to pay under the loan docs.