Markit Group Limited and Creditex Group Inc., in partnership with 13major credit derivative dealers, have successfully conducted a CreditEvent Auction to generate a cash settlement price for contractsreferencing Quebecor World Inc.
At 2.00pm EST, the final price was fixed at 41.25%. Creditex and Markit are the official administrators of theCredit Event Auctions.
Quebecor World Inc., a Canadian commercial printer, missed a 15 January,2008 interest payment on its senior notes and filed for protection fromcreditors on 21January 2008, triggering a credit event on its CDScontracts referencing the company.
The Credit Event Auction enabled institutions to cash settlesingle-name, index and tranche CDS at the final auction price. Theauction was run in accordance with the ISDA 2008 Quebecor CDS Protocolpublished on 31 January 2008.
During the Credit Event Auction, dealers submitted orders electronicallyon the Creditex platform. The auction submissions were delivered toMarkit electronically who calculated and verified the results, andpublished them on the official website.
The Credit Event Auction process was launched in 2005 by Markit andCreditex in collaboration with ISDA and major credit derivative dealersto facilitate the settlement of credit derivative contracts in the eventof a corporate default. Previous auctions were held for Movie Gallery,Collins & Aikman, Delta Air Lines, Northwest Airlines, DelphiCorporation, Calpine Corporation, Dana Corporation and Dura.