AIB credit-default swaps for auctions

CREDIT-DEFAULT swaps on Allied Irish Bank will be settled at auctions after the International Swaps & Derivatives Association (ISDA) ruled there has been a failure-to-pay credit event.

AIB caused the event when it skipped payments on subordinated bonds this month.

This trumps ISDA’s ruling last week that a restructuring event had occurred when AIB changed terms on subordinated bonds, wiping out investors who refused to accept as much as a 90% discount.