March 21, 2019

Milbank to Host Discussion of ISDA’s Proposal to Revise the CDS Contract

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Milbank LLP will be hosting a discussion of ISDA’s proposal to revise the CDS contract to address “manufactured credit events." A Milbank team led by Derivatives partner John Williams was involved in organizing and advising the “CDS Improvement Committee,” an ad hoc group of credit default swap (“CDS”) market participants which was central to the development of the International Swap and Derivatives Association Inc.’s (“ISDA”) proposal addressing issues relating to “Narrowly Tailored Credit Events” under the 2014 ISDA Credit Derivatives Definitions. If adopted, the proposed revision would remove the incentive for CDS buyers to enter into agreements that would “manufacture” failure to pay Credit Events not related to a deterioration of the borrower’s creditworthiness or financial position.

Topics of the discussion will include:

  • What the proposal does and doesn’t do, and why we believe it should be helpful for the CDS product and the market generally
  • The key role that buyside firms played in shaping it and what that might mean for future product improvements
  • What role CDS may play in restructurings going forward

The March 21 event will be held at Milbank's New York office at Hudson Yards and the April 8 event will be held at Milbank's London office.