Abitibi-Consolidated misses loan payment
March 27th, 2009 | Posted in Financial News | 2 comments ยป
Abitibi-Consolidated, a subsidiary of AbitibiBowater, failed to make payment on its loan this month.
Abitibi-Consolidated won court protection early this month that would not allow creditors to accelerate debt payments due to the loan default until its restructuring is completed.
But that protection does not apply to the company’s credit default swaps that insure the debt.
A credit default swap (CDS) is a credit derivative contract between two counterparties. The buyer makes periodic payments to the seller, and in return receives a payoff if an underlying financial instrument defaults.
The International Swaps and Derivatives Association said today that it will launch a protocol that will allow payments on the credit default swaps to be made in a cash auction.
Read more:
Abitibi-Consolidated CDS triggered by loan miss (Reuters)
AbitibiBowater Credit-Default Swaps to Be Settled at Auction (Bloomberg)
can someone explain, what the H is going on with Abitibi? The newspaper article made no sense,whatsoever.
Are they still in business,or are they about to shutdown? I’d hate to see any more Mills have to close,and more fellow workers collecting E.I.
The only ones that win are the CEOs and Chairmans with golden parachutes. John Weaver f***ed up when he paid way too much for Donohue back in 2000. Oh well he is gone with his handsome package and deep gruff voice…maybe his fat friend can save the company you think??