CDS documentation

Edward Santevecchi and Mark Adelson, in fixed-income research at Nomura, highlight the lessons learned from the recent 'Aon v. SocGen' CDS litigation case in the US

On February 5, the US Court of Appeal made an important decision in the Aon Financial Products v. Societe Generale case. Reversing the original verdict of the district court which found against SocGen, the appeal court concluded that credit default swap documentation should be interpreted strictly in accordance with its terms and independently of the parties' other transactions or relationships.

Here's what happened: Bear Stearns International Limited made a loan to a land developer in the