On August 12, 2009 the Credit Derivatives Determination Committee for EMEA resolved that a Restructuring Credit Event has occurred with respect to Thomson and the date of the Credit Event is 15 June 2009. The EMEA Determination Committee also resolved that one or more auctions may be held to settle relevant transactions with respect to this Restructuring Credit Event. This page contains details of the DC Resolutions, auction documentation and other items relating to the auctions for Thomson, as well as FAQs with respect to the Restructuring Credit Event process.
Note:
This determination relates to the company called “Thomson”, which is referred to in some documents as “Thomson SA”. We understand that there was previously a different company called “Thomson SA”, which changed its name to “TSA” in January 2003. For the avoidance of doubt, the Determinations Committee has not made a determination with regard to this latter company.
Further documentation relating to the auction will be added as it becomes available.
Event Publicly Available Information:
On 8 August 2009 Thomson SA released a statement on their website indicating that on 15 June 2009, they and all the holders of the 6.05% Senior Notes, Series A due 2009 issued by them (the "Notes") entered into a waiver and forbearance agreement ("Waiver Agreement") to defer payment of principal thereof in an amount equal to USD 72,500,000 from 17 June 2009 to 25 July 2009. The Waiver Agreement binds all holders of the Notes which at the time of such waiver comprised of more than three holders who are not affiliates of each other. http://www.thomson.net/GlobalEnglish/Corporate/InvestorCenter/Pages/default.aspx The deferment of principal of the Notes directly or indirectly results from the deterioration in the creditworthiness or financial condition of Thomson. Please see Section 1.3 of their 2008 Annual Report as filed with the United States Securities and Exchange Commission for further details: Link
| Auction Timeline: | http://www.cdsdeterminationscommittees.org/companies/ISDACreditAuctionTimeline.pdf |
| List of Participating Bidders: | List of Participating Bidders |
| Deliverable Obligations: | Final List
The Exercise Cut-off Date for a Seller wishing to deliver a Credit Event Notice expired on Thursday 8th October. The Exercise Cut-off Date for a Buyer wishing to deliver a Credit Event Notice expired on Tuesday 13th October 2009. |
| Thomson Auction Settlement Terms: | Thomson Auction Settlement Terms |
| Cash Settlement/Minimum Transfer Amount Memorandum: | Further Information Concerning the Cash Settlement Mechanics |
| Deriv/SERV Thomson triggered transactions data: | Thomson triggered transactions data |
| FAQs: | Restructuring Credit Event FAQs |
| CDS Contracts with a Scheduled Termination Date of 20 September 2009 We have been receiving queries regarding CDS contracts with a Scheduled Termination Date of 20 September 2009. Assuming that:both parties to the Transaction have adhered to the Small Bang Protocol; the Transaction is on standard terms and is a Protocol Covered Transaction; the Credit Event Resolution Request Date (here, 10 August 2009) occurred on or prior to the last day of Notice Delivery Period; and Mod Mod R (or Mod R) is applicablethe contract is triggerable by delivery by either Buyer or Seller of a Credit Event Notice specifying Restructuring as the relevant Credit Event on or before the Exercise Cut-off Date (even if such date falls after the end of the Notice Delivery Period). Since the DC has already Resolved that one or more Auctions may be held to settle the Thomson Restructuring Credit Event, the Exercise Cut-off Date (for which, see Section 1.26 of the 2003 ISDA Credit Derivatives Definitions, as supplemented by the July 2009 Supplement) is (i) two London Business Days, if the Credit Event Notice is delivered by Seller, or (ii) five London Business Days, if the Credit Event Notice is delivered by Buyer, after the date on which ISDA publishes the Final List. Therefore, with respect to the standard contracts as described above, the occurrence of a Scheduled Termination Date on 20 September 2009 will have no consequence on the parties' ability to trigger based on this Restructuring. Premium Where both Seller and Buyer deliver Credit Event Notices To take specific examples: Assuming the Final List is published on Tuesday 6 October: Example one: Floating Rate Payer Calculation Amount: 100 The result will be that 50 of the CDS would be triggered by Buyer and 50 by Seller, such that the entire CDS would have been triggered. Example two: Floating Rate Payer Calculation Amount: 100 The result would be that 50 of the CDS would be triggered by Buyer and 50 by Seller, such that the entire CDS would have been triggered. The additional 10 which Buyer attempted to trigger would be ignored and Seller's Credit Event Notice would prevail to this extent. Example three: Floating Rate Payer Calculation Amount: 100 The result will be that 50 of the CDS would be triggered by Buyer and 50 by Seller, such that the entire CDS would have been triggered. Example four: Floating Rate Payer Calculation Amount: 100 The result will be that only 50 of the CDS will be triggered by Buyer. Seller's notice will not be valid since it falls outside of the Seller Trigger Period. |
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