Greece's recent moves to prepare for a debt restructuring have not triggered a payout on credit default swaps, the International Swaps and Derivatives Association said on Thursday.

However, a credit event is still widely expected if Greece uses recently approved legislation enabling it to force its debt restructuring upon all of its private creditors. This could happen shortly after the window for the restructuring deal closes on March 8.

ISDA's Thursday ruling means holders of these insurance contracts, worth a net $3.25 billion, will not receive payment at this stage, though further rulings based on any new questions are still possible.

The situation in the Hellenic Republic is still evolving and today's EMEA (determinations committee) decisions do not affect the right or ability of market participants to submit further questions, ISDA said in their statement.

The committee was asked to consider whether a 'credit event' had occurred as a result of new Greek legislation that could force all bondholders to accept losses and after the European Central Bank took steps to avoid losses on its Greek bonds.

The 15 ISDA committee members voted unanimously that this did not meet the ISDA definition of a credit event.


For more on the ISDA decision-making process, see

For a list of current determinations committee members, see:


The decision was anticipated by many market participants given it was hard to prove that bondholders had been legally placed behind the ECB in the queue to be paid.

Previous legal guidance had also suggested that the inclusion of collective action clauses alone was not enough to trigger CDS payouts.

However the use of those clauses, which allow Greece to enforce changes on all bondholders if it achieves the support of a two-thirds majority of them, is still expected to trigger a credit event.

(Editing by Hugh Lawson)