On September 21, 2011 the Japan Credit Derivatives Determinations Committee resolved that a Restructuring Credit Event occurred in respect of Victor Company of Japan, Limited and subsequently resolved that an Auction or Auctions would be held. This page contains details of the DC Resolutions, auction documentation and other items relating to the auction for Victor Company of Japan, Limited.
Further documentation relating to the auctions will be added as it becomes available.
Please note that ISDA has published a Uniform Settlement Agreement to facilitate the orderly settlement of transactions that are subject to the above Credit Event announcement, this is below, together with a Frequently Asked Questions document for reference.
Event Publicly Available Information:
Question: Has a Restructuring Credit Event occurred with respect to Victor Company of Japan, Limited? On August 8, 2011, JVC KENWOOD Corporation (“JVC KENWOOD”) announced that, by the resolution of the bondholder’s meeting held on August 8, 2011(the “Resolution”), in relation to the No. 7 Unsecured Bond (the “Bond”) issued in August 2007 by its subsidiary, Victor Company of Japan, Limited (“JVC”), the modification of the Terms and Conditions of the Bond (the “Term Modification”) was approved. The Term Modification includes the extension of the Bond’s maturity date by one year for 50 per cent of the remaining principal balance of the Bond (JPY 6.0 billion) and by three years for the remaining 50 per cent (JPY 6.0 billion). According to the Notice of Bondholders Meeting on Term Modification (Extension of Due Date, etc.) of Subsidiary’s No. 7 Unsecured Bond, and Shelf Registration For Issue of Stock Acquisition Rights In Relation To Term Modification dated July 15, 2011 (the “Notice”), one of the reasons for implementing the Term Modification is that “JVC KENWOOD and its subsidiary Kenwood Corporation have not acquired any rating, while the rating on JVC has decreased compared with the time when JVC issued the unsecured bonds in August 2007, and hence, it is difficult to issue new bonds at the moment”. The Resolution was approved by the Yokohama District Court on August 12, 2011. The Term Modification became effective on August 25, 2011 upon the satisfaction of the condition that JVC KENWOOD had not resolved to cancel the issuance of stock acquisition rights that JVC KENWOOD resolved to issue to the holders of the Bond on August 1, 2011. Publicly Available Information: http://www.tse.or.jp/disc/66320/140120110715082397.pdf http://www.tse.or.jp/disc/66320/140120110808099510.pdf http://www.tse.or.jp/disc/66320/140120110812002819.pdf http://www.tse.or.jp/disc/66320/140120110824005953.pdf English translations of the above announcements: http://www.jvckenwood.co.jp/en/press/2011/08/press_110808_02.pdf http://www.jvckenwood.co.jp/en/press/2011/07/press_110715_02.pdf http://www.jvckenwood.co.jp/en/press/2011/08/press_110812.pdf http://www.jvckenwood.co.jp/en/press/2011/08/press_110825.pdf
| Auction Timeline: | Common Event Determination Date: Friday, August 26, 2011 The question as to whether a Succession Event has occurred in relation to Victor Company of Japan, Limited has now been determined by the Japan Determinations Committee (Issue number 2011100301). ISDA will publish further details in respect of the Auction process once all relevant obligations have been reviewed. |
| List of Participating Bidders: | List of Participating Bidders |
| Uniform Settlement Agreement | Victor Company of Japan, Limited Uniform Settlement Agreement (the USA)
The adherence period for the USA has now closed. |
| Deliverable Obligations | Final List of Deliverable Obligations |
| Auction Settlement Terms: | Auction Settlement Terms for JVC Kenwood Corporation |
| Related Press Release: | ISDA Determinations Committee: Victor Company of Japan, Limited |
| Transactions Covered by the Auction: | Further to the Japan DC Succession Event Resolution of 17 October 2011 in respect of Victor Company of Japan, Limited, please note that:
i)Transactions referencing JVC KENWOOD Corporation (regardless of the Trade Date) have not been affected by a Credit Event and therefore are not capable of being triggered, unless the parties specifically agree otherwise in the case of transactions entered into after the Succession Event Resolution; ii)Transactions with a Trade Date prior to 17 October referencing Victor Company of Japan, Limited will, if already triggered, remain triggered and otherwise, are capable of being triggered until the Exercise Cut-off Date (either by entry into the Uniform Settlement Agreement published by ISDA or otherwise); iii)Transactions with a Trade Date of 17 October or thereafter which the parties intend to function as if they had been Transactions entered into prior to that date referencing Victor Company of Japan, Limited will have to state explicitly that they are subject to the Credit Event (and hence are triggerable) and that they are subject to the Succession Event determination of 17 October. As noted above, parties signing the USA will be deemed to cover these transactions. |
| Additional Information regarding triggering in DTCC: | If you intend on triggering through DTCC, please note that paragraph B of Section VIIIA (Processing for Restructuring Credit Events) of the Operating Procedures for the Warehouse Trust Company (which can be found at http://www.dtcc.com/customer/membership/derivserv/derivserv.php) includes language that confirms that a trigger through DTCC (credit event notice facility) constitutes deemed delivery of a Credit Event Notice and as such, no additional notices are required to be delivered to trigger the occurrence of an Event Determination Date. |