Greece and Those CDS Create Market Havoc Again

A done deal is not really a done deal when it comes to Greece! Forbes reports that the debt swap with private sector bondholders may not come off as planned.

"Twelve banks in Europe have signed on to the swap – which will see creditors take a 53.5% haircut to the face value of their holdings – including BNP Paribas, Deutsche Bank, Commerzbank and National Bank of Greece, but only hold about one-fifth of the Greek bonds eligible for the swap".

While the deal could win 75%-80% participation, enough to execute the swap, however, the 90% that could require holdouts to acquiesce without enforcing retroactive collective action clauses (CAC).

ISDA, the body deciding whether the Greek deal will trigger credit default swaps (CDS) on the Hellenic Republic’s debt, has said that the use of CAC would lead it to revisit its current determination that Greek CDS will not pay out.

All to be likely "resolved":