Event Publicly Available Information:
PDF DocumentThis request relates to transactions subject to the decisions of the Credit Derivatives Determinations Committee (the “Committee”), including Standard North American Corporate CDS and bullet LCDS contracts, for which the Reference Entity is Texas Competitive Electric Holdings Company LLC (“TCEH”). We are requesting the Committee to answer two questions: Question 1: Has a Bankruptcy Credit Event under Section 4.2(b) occurred by virtue of TCEH’s insolvency? Question 2: Did such Credit Event occur on or after the Credit Event Backstop Date? We believe the answer to both of these questions is resoundingly “yes.” We believe the answer to Question 2 cannot be “no” unless the Committee reaches one of the following conclusions: (x) TCEH is not insolvent (so the answer to Question 1 is “no”). In this event, it would be important for the Committee to report that determination, so market participants will know that this request was premature and can be re-raised at a later date if the circumstances so warrant. (y) TCEH is insolvent, but the associated Credit Event is for some reason determined not to have occurred on or after the Credit Event Backstop Date. In this event we hereby request the Committee to report the date on which that Credit Event occurred, so market participants will learn to assert insolvency at a point in time that might otherwise appear premature to responsible market participants (as it did to us in the present instance). Because our submission to the Committee contains tables and graphs that would not format correctly in this web-based form, we are (in accordance with our discussions with ISDA staff) sending our submission to the ISDA Secretary for further distribution to the Committee and for dissemination to the public. We wish to ensure that our request is not misconstrued when it reaches the public domain. Nothing herein asserts a claim against, alleges a default by, or seeks any remedy from TCEH. Rather, we seek a determination that holders of TCEH credit protection are now entitled to realize the benefits of that protection as against sellers of that protection. Accordingly, TCEH should have no interest in this matter, and we would not expect TCEH to respond to or otherwise involve itself in this request. If TCEH (or an affiliate) nonetheless involves itself in the Committee’s consideration of this request, we would request the opportunity to review and respond to its submission and ask reasonable questions of its knowledgeable representatives.