The SEAT European LCDS Auction relates to settlement of transactions referencing a certain SEAT Obligation (where SEAT Pagine Gialle S.p.A. (“SEAT”) is the Reference Entity). SEAT is included in the LevX credit derivative index and is the subject of single-name loan CDS trades.
The circumstances in which an auction will be held are governed by the ELCDS Auction Rules, published by ISDA on 3 October 2008. In accordance with these Rules, the Markit iTraxx LevX Market Makers determined that a Failure to Pay Credit Event occurred in respect of the Reference Entity and have voted to hold an auction in respect of SEAT. The terms of the auction are contained in the ELCDS Auction Settlement Terms for SEAT (the “Auction Terms”), which were published by ISDA on 12 January 2012.
The auction is scheduled for 17 January 2012. Markit and Creditex will administer the auction. The cash settlement date for Covered Transactions (as defined in the Auction Terms) will be 24 January 2012.
Market participants wishing to submit a physical settlement request into the auction must submit a valid Customer Physical Settlement Request Letter to their relevant Participating Bidder at or prior to 5:00 p.m. London time on the Business Day prior to the Auction Date. The relevant form of Customer Physical Settlement Request Letter is linked below.
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Deliverable Obligations Subject to a Lock-Up
Participants are reminded that transferees under a RAST are not obliged to adhere to any Lock-Up Agreement. We draw all parties’ attention to the representations that are deemed to be given pursuant to Section 9.2(a) of the 2003 ISDA Credit Derivatives Definitions by a transferor under a RAST to a transferee under a RAST with respect to obligations transferred. This means that any Deliverable Obligations (as defined in the ELCDS Auction Terms) which are subject to a Lock-Up Agreement which requires adherence by a transferee cannot be delivered in settlement of a RAST.
For the avoidance of doubt, any Deliverable Obligations which are not subject to a Lock-Up Agreement will be unaffected.
Minimum Transfer Amount / Minimum Holding Amount
We understand that, broadly, transfers to an entity that is not (i) an IBLOR Credit Support Provider (as defined in the ELCDS Auction Terms) or (ii) connected to an IBLOR Credit Support Provider must hold or have transferred a minimum of €2,000,000. Please refer to the Credit Support Agreement originally dated 25 May 2005 (as amended and supplemented from time to time) for exact terms. Kindly note that, as a result of the minimum transfer amount and the minimum holding amount, “Quotation Amount” for the purposes the ELCDS Auction Terms has been amended accordingly.