Obbligazioni perpetue e subordinate SNS Reeal in diretta: storia di un esproprio - Notizie, informazioni e commenti
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SNS Reaal potential test case for CDS changesExpand Story >>
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* Compensation claims could be delivered into CDS auction
* ISDA Determinations Committee to meet Wednesday
* Lessons from SNS Reaal to feed into CDS overhaul
By Christopher Whittall
LONDON, Feb 26 (IFR) - SNS Reaal could be used as a test case for a crucial alteration being planned for credit default swap contracts that experts say is needed to ensure fairer payouts for protection holders in light of more aggressive debt restructurings.
Ensuring that securities other than bonds can be delivered into CDS auctions - often referred to as an "asset package" - is one of the key changes that the International Swaps and Derivatives Association (ISDA) is expected to make to its new credit definitions set to be released later this year.
The plight of SNS Reaal bondholders serves as a stark reminder of why the changes are needed, as the Dutch government's shock decision to expropriate all of the bank's subordinated debt could hit junior investors with a double whammy.
As well as losing out completely on their cash position, investors may find their CDS protection is also worthless due to the disappearance of the sub bonds, which would usually be used to calculate CDS payouts.
David Geen, ISDA's general counsel, said he was not aware of any discussions around the possibility of delivering an asset package of compensation claims against the Dutch government into the SNS Reaal CDS auction in lieu of the expropriated bonds, but signalled the option was not off the table.
"Under the CDS Definitions, it is within the power of the Determinations Committee (DC) to specify other assets as deliverable by amending the Auction Settlement Terms," said Geen, who pointed to a precedent from a previous credit event in the US.
"That said, the DC may be wary about doing so, and it would require a broad consensus."
COMPENSATION CLAIM
Like others before it - including the high profile case of Greece - SNS Reaal has exposed a potential flaw in restructuring credit events.
The current ISDA credit definitions only permit bonds to be delivered into CDS auctions. As a result, credit experts say the most likely outcome is that SNS Reaal's senior bonds are used to calculate CDS payouts. The problem is that senior bonds are trading around par, meaning protection holders would receive no meaningful remuneration.
"The concern in SNS is that the CDS contracts may not function properly in this case and, more importantly, in future restructurings of other banks," said Michael Hampden-Turner, credit strategist at Citigroup.
"The fear is this scenario might be repeated throughout Europe and it could put people off holding sub debt. There is a general concern policymakers are no longer bothered about the CDS market anymore."
One possible solution is to allow other securities to be delivered into the auction instead, if the bonds have already been wiped out or exchanged for other securities.
James Duncan, a partner at Shearman & Sterling, highlighted that SNS Reaal investors have the right to claim compensation against the Dutch government. These claims, like the SNS Reaal subordinated bonds, are likely to be valued at zero.
In principle, if the CDS definitions allowed it, the compensation package could be valued, which could then be used to calculate the CDS payouts, said Duncan.
"The question is whether ISDA will allow a security to trade which represents the compensation claims of bondholders. That does not fit with the current definitions and would mean ISDA would have to stretch the contract," said Hampden-Turner at Citigroup.
TEST CASE
ISDA's DC is due to meet on Wednesday to decide whether one or more CDS auctions on SNS Reaal will be held.
The number of outstanding CDS on the bank does not even figure in the top 1,000 names on the DTCC website, meaning that the outstanding amount likely clocks in at below USD50m - a drop in the ocean in the USD27trn CDS market.
Even so, whatever the decision, it seems a number of lessons from the nationalisation of SNS Reaal will be used to further improve CDS contracts.
"The volumes of SNS Reaal CDS are very small - people see it as a test case. We are still in the process of updating the credit definitions with the aim of finalising in mid-2013, and what happens in SNS Reaal will get rolled into that as well," said ISDA's Geen.
For instance, there is a working group at ISDA that will look specifically at whether the credit definitions could be updated to take into account bail-in of senior and sub debt.
While CDS on SNS Reaal were judged by a majority of 14 to one to have triggered, Geen said clarifying the definitions so that a nationalisation or expropriation of debt is a credit event may be considered.
Elsewhere, Geen poured cold water on the idea that ISDA may be preparing to engage in talks with the Dutch government to release at least one liquid bond that could be deliverable into a CDS auction - a tactic used in the Irish bank restructurings and discussed in Greece.
"ISDA has had no discussions along these lines - the Dutch government owns that debt now," said Geen.
Either way, CDS practitioners will be watching the DC's deliberations closely. While the measly amount of CDS outstanding should ensure the outcome of SNS Reaal has no meaningful economic impact, the wider implications for the market could be significant.
(Reporting By Christopher Whittall; Editing by Natalie Harrison and Julian Baker)
(([email protected])(+44 20 7369 7350)(Reuters Messaging: [email protected]))
Keywords: SNS REAAL CDS/ISDA
<< Reduce Story
* Compensation claims could be delivered into CDS auction
* ISDA Determinations Committee to meet Wednesday
* Lessons from SNS Reaal to feed into CDS overhaul
By Christopher Whittall
LONDON, Feb 26 (IFR) - SNS Reaal could be used as a test case for a crucial alteration being planned for credit default swap contracts that experts say is needed to ensure fairer payouts for protection holders in light of more aggressive debt restructurings.
Ensuring that securities other than bonds can be delivered into CDS auctions - often referred to as an "asset package" - is one of the key changes that the International Swaps and Derivatives Association (ISDA) is expected to make to its new credit definitions set to be released later this year.
The plight of SNS Reaal bondholders serves as a stark reminder of why the changes are needed, as the Dutch government's shock decision to expropriate all of the bank's subordinated debt could hit junior investors with a double whammy.
As well as losing out completely on their cash position, investors may find their CDS protection is also worthless due to the disappearance of the sub bonds, which would usually be used to calculate CDS payouts.
David Geen, ISDA's general counsel, said he was not aware of any discussions around the possibility of delivering an asset package of compensation claims against the Dutch government into the SNS Reaal CDS auction in lieu of the expropriated bonds, but signalled the option was not off the table.
"Under the CDS Definitions, it is within the power of the Determinations Committee (DC) to specify other assets as deliverable by amending the Auction Settlement Terms," said Geen, who pointed to a precedent from a previous credit event in the US.
"That said, the DC may be wary about doing so, and it would require a broad consensus."
COMPENSATION CLAIM
Like others before it - including the high profile case of Greece - SNS Reaal has exposed a potential flaw in restructuring credit events.
The current ISDA credit definitions only permit bonds to be delivered into CDS auctions. As a result, credit experts say the most likely outcome is that SNS Reaal's senior bonds are used to calculate CDS payouts. The problem is that senior bonds are trading around par, meaning protection holders would receive no meaningful remuneration.
"The concern in SNS is that the CDS contracts may not function properly in this case and, more importantly, in future restructurings of other banks," said Michael Hampden-Turner, credit strategist at Citigroup.
"The fear is this scenario might be repeated throughout Europe and it could put people off holding sub debt. There is a general concern policymakers are no longer bothered about the CDS market anymore."
One possible solution is to allow other securities to be delivered into the auction instead, if the bonds have already been wiped out or exchanged for other securities.
James Duncan, a partner at Shearman & Sterling, highlighted that SNS Reaal investors have the right to claim compensation against the Dutch government. These claims, like the SNS Reaal subordinated bonds, are likely to be valued at zero.
In principle, if the CDS definitions allowed it, the compensation package could be valued, which could then be used to calculate the CDS payouts, said Duncan.
"The question is whether ISDA will allow a security to trade which represents the compensation claims of bondholders. That does not fit with the current definitions and would mean ISDA would have to stretch the contract," said Hampden-Turner at Citigroup.
TEST CASE
ISDA's DC is due to meet on Wednesday to decide whether one or more CDS auctions on SNS Reaal will be held.
The number of outstanding CDS on the bank does not even figure in the top 1,000 names on the DTCC website, meaning that the outstanding amount likely clocks in at below USD50m - a drop in the ocean in the USD27trn CDS market.
Even so, whatever the decision, it seems a number of lessons from the nationalisation of SNS Reaal will be used to further improve CDS contracts.
"The volumes of SNS Reaal CDS are very small - people see it as a test case. We are still in the process of updating the credit definitions with the aim of finalising in mid-2013, and what happens in SNS Reaal will get rolled into that as well," said ISDA's Geen.
For instance, there is a working group at ISDA that will look specifically at whether the credit definitions could be updated to take into account bail-in of senior and sub debt.
While CDS on SNS Reaal were judged by a majority of 14 to one to have triggered, Geen said clarifying the definitions so that a nationalisation or expropriation of debt is a credit event may be considered.
Elsewhere, Geen poured cold water on the idea that ISDA may be preparing to engage in talks with the Dutch government to release at least one liquid bond that could be deliverable into a CDS auction - a tactic used in the Irish bank restructurings and discussed in Greece.
"ISDA has had no discussions along these lines - the Dutch government owns that debt now," said Geen.
Either way, CDS practitioners will be watching the DC's deliberations closely. While the measly amount of CDS outstanding should ensure the outcome of SNS Reaal has no meaningful economic impact, the wider implications for the market could be significant.
(Reporting By Christopher Whittall; Editing by Natalie Harrison and Julian Baker)
(([email protected])(+44 20 7369 7350)(Reuters Messaging: [email protected]))
Keywords: SNS REAAL CDS/ISDA
mauro1969
Forumer attivo
Sinceri complimenti, avete ottenuto un risultato notevolissimo in una situazione difficilissima e in tempi risicati. Complimenti anche a Grimaldi.
Ora il "furto" é stato ricondotto ad un esproprio che deve essere indennizzato a dovere.
Sull'indennizzo ora giocate ad armi pari e le carte uscite post esproprio (CVC) saranno utili ad impedire a DJ offerte ridicole, a meno che sia stupido.
Non sempre é solo una questione di soldi, ma questa volta era l'abuso della legge e lo stracciare contratti che andava ricondotto alla ragione: a prescindere dall'indennizzo che verrà ritenuto congruo dalla Chamber, avete contribuito a riportare un poco di certezza del diritto in un campo, la finanza, dove ultimamente i contratti a volte valgono come kleenex.
Oltretutto si apre la strada non irrilevante del risarcimento per comunicazioni misleading della banca, e quel diritto, se venisse riconosciuto, non si espropria come una sub.
Bravissimi!
Ultima modifica:
Zorba
Bos 4 Mod
Credo che Dj si stia accorgendo che potrebbe dover pagare come risarcimento danni quanto sottratto con l'esproprio....
*.*.*
Minister avoids 'legal swamp', no probe into what went wrong at SNS
Tuesday 26 February 2013
The government will not order a far-reaching inquiry into what went wrong at financial services group SNS Reaal, which was nationalised at the beginning of this month.
Finance minister Jeroen Dijsselbloem told RTL Z on Tuesday he did not favour a legal inquiry. 'I think the company should now look to the future. I do not believe in a legal swamp,' the minister said.
The investors' association VEB had urged the minister to commission an inquiry in an effort to find out what went wrong. Only shareholders can request an inquiry at the company court and the state is now the sole shareholder in SNS.
Proof
Dijsselbloem also said it would be difficult to prove the company had been mismanaged. 'Investment decisions were taken which worked out badly but ... the question remains, can you make the executives legally responsible?' the minister said.
The VEB, which represents hundreds of investors who lost money when their shares were taken over by the government without compensation, can also try to force a fact-finding investigation at the company court in Amsterdam.
On Monday, the Council of State ruled Dijsselbloem was within his rights to expropriate all the shares in SNS Reaal in order to ensure the stability of the Dutch financial system. But the minister was wrong to try to pre-empt any compensation claims, the court said.
*.*.*
Minister avoids 'legal swamp', no probe into what went wrong at SNS
Tuesday 26 February 2013
The government will not order a far-reaching inquiry into what went wrong at financial services group SNS Reaal, which was nationalised at the beginning of this month.
Finance minister Jeroen Dijsselbloem told RTL Z on Tuesday he did not favour a legal inquiry. 'I think the company should now look to the future. I do not believe in a legal swamp,' the minister said.
The investors' association VEB had urged the minister to commission an inquiry in an effort to find out what went wrong. Only shareholders can request an inquiry at the company court and the state is now the sole shareholder in SNS.
Proof
Dijsselbloem also said it would be difficult to prove the company had been mismanaged. 'Investment decisions were taken which worked out badly but ... the question remains, can you make the executives legally responsible?' the minister said.
The VEB, which represents hundreds of investors who lost money when their shares were taken over by the government without compensation, can also try to force a fact-finding investigation at the company court in Amsterdam.
On Monday, the Council of State ruled Dijsselbloem was within his rights to expropriate all the shares in SNS Reaal in order to ensure the stability of the Dutch financial system. But the minister was wrong to try to pre-empt any compensation claims, the court said.
Topgun1976
Guest
Ma pensa...scommetto che se ieri il giudice espropiava anche i nostri diritti avrebbe fatto un'indagine minuziosa..
sinequanon
Nuovo forumer
mypa22
Forumer attivo
Davvero sto ricciolino non conosce la vergogna !!!! Per me i casi sono 2 : o pensa di avere a che fare con persone che portano l'anello al naso oppure è' ormai in preda ad un delirio di onnipotenza che nel suo immaginario lo porterà' ad essere considerato il nuovo sergente di ferro dell'Europa moderna. Ho una voglia di lisciargli i capelli che non ve lo immaginate nemmeno!!!!!
LUNA
Guest
ESTRATTO DAL PARERE DEL CONSIGLIO DI STATO OLANDESE IN MERITO ALLA MODIFICA DELLA LEGGE SULLA VIGILANZA FINANZIARIA NELLA DIREZIONE DI CONSENTIRE L'ESPROPRIO:
D'altra parte, ovviamente, lo Stato non non può fare affidamento sul fatto che il valore della quota, se non fosse avvenuta espropriazione, probabilmente sarebbe caduto ulteriormente. Determina il valore effettivo al momento dell'esproprio.
(traduzione da google)
https://zoek.officielebekendmakinge...1&rpp=10&resultIndex=0&sorttype=1&sortorder=4
Significa che la teoria che in caso di fallimento il valore sarebbe stato comunque 0 non è giustificata?
D'altra parte, ovviamente, lo Stato non non può fare affidamento sul fatto che il valore della quota, se non fosse avvenuta espropriazione, probabilmente sarebbe caduto ulteriormente. Determina il valore effettivo al momento dell'esproprio.
(traduzione da google)
https://zoek.officielebekendmakinge...1&rpp=10&resultIndex=0&sorttype=1&sortorder=4
Significa che la teoria che in caso di fallimento il valore sarebbe stato comunque 0 non è giustificata?
Ultima modifica di un moderatore:
Topgun1976
Guest
Mi sà che ieri mentre si leggeva la sentenza gli è andato qlc di traverso..pensava seriamente che fossimo già fuori dai giochi
Tobia
Forumer storico
ricciolino mio, siediti ed inspira bene prima di formulare la somma in compensazione
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