TriOptima tears up $720 billion of Delphi-related CDS
Stockholm-based TriOptima has executed a further credit default swap (CDS) termination cycle, tearing up more than $720 billion contracts involving the troubled Michigan-based auto-parts maker, Delphi.
The Swedish firm also scheduled a special index termination cycle for October 20, having completed a regular index termination cycle on October 7. A total of 17,344 Delphi-affected index swaps with a notional value of almost $700 billion was torn up.
TriOptima’s tear-up technology allows swaps counterparties to multilaterally eliminate unnecessary trades from their books while allowing them to maintain the same net position in regular termination cycles. But targeting contracts where there has been a credit event also allows participants to eliminate many of the legal and administrative burdens involved in the settlement of a defaulted name.
Since the beginning of the year, TriOptima has terminated over 100,000 CDS contracts with a notional value of $2.3 trillion.
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