Following last week’s vote by the International Swaps and Derivatives Association’s (ISDA) Determination Committee to hold an auction on credit default swap (CDS) trades referencing Truvo Subsidiary Corp. (Truvo), Markit today announced that the Markit iTraxx LevX index dealers have voted to conduct a Credit Event Auction to facilitate settlement of second lien European loan-only credit default swap (ELCDS) trades referencing Truvo. Truvo is a constituent of the Markit iTraxx LevX Subordinated Series 2 and 3.
The auction terms, including the auction date, will be determined by Markit iTraxx LevX dealers according to ELCDS Auction Rules published on the International Swaps and Derivatives Association (ISDA) website. Markit and Creditex are the official administrators of Credit Event Auctions. An auction date and an auction timeline will be posted on www.creditfixings.com.
The Credit Event Auction process was launched in 2005 by Markit and Creditex in collaboration with ISDA and major credit derivative dealers. Since then, Markit and Creditex have conducted over 90 Credit Event Auctions and the process has become an integral part of CDS market infrastructure.