The Credit Derivatives Determinations Committee will meet on Tuesday to consider whether a “governmental intervention credit event” occurred when Credit Suisse Group AG’s Additional Tier 1 bonds were written down as part of the Swiss Bank's rescue by rival UBS, according to a report by Bloomberg.
If the panel of about a dozen banks and asset managers decides it did, it would be the first step in determining whether credit default swaps linked to the Swiss bank will be triggered and could potentially lead to a payout for a number of hedge fund firms.
Both FourSixThree Capital and Diameter Capital Partners have reportedly been buying swaps insuring Credit Suisse’s subordinated bonds, betting that the controversial writedown could prompt a payout of the derivative contracts.
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