Greece Default Is Official; Insurance Payouts Triggered
A group representing dealers in credit default swaps decided Friday that Greek's bond swap constitutes a "credit event" that entitles holders of Greek credit default swaps to compensation.
The "yes" vote by the International Swaps and Derivatives Association triggers roughly $3.2 billion in CDS, which are insurance policies that pay out if a bond issuer defaults. That amount is actually much smaller than many had feared.
The decision was widely expected, and stocks were slightly down after the announcement.