Novo Banco Swaps Payout Sent for Review Following Split Vote
- ISDA committee fails to reach supermajority needed for ruling
- Decision centers on transfer of bonds to Portuguese bad bank
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An industry group failed to reach a decision on whether credit-default swaps insuring Novo Banco SA debt should pay out, triggering an external review.
A committee of 15 dealers and money managers was unable to agree on whether a governmental intervention credit event had taken place at the Portuguese lender, the International Swaps & Derivatives Association said in a statement on Tuesday. Eleven committee members voted to say no event occurred, one short of the 12 needed for a ruling. The other four members said an event had taken place.