IL&P credit event confirmed

Dublin: The International Swaps and Derivatives Association said yesterday a restructuring credit event occurred at Irish Life & Permanent Group two days previously.

IL&P, effectively nationalised last month following a €2.7 billion state injection, announced the results of a tender offer regarding some of its junior debt on Wednesday.

A credit event is jargon for default on payment, breach of bond covenants or other event that casts doubt on an issuer’s ability to service its debt.

The derivatives industry body has the final say on whether a credit event has occurred, a ruling that can trigger the payout of CDS — a popular financial tool used to hedge risk and speculate on changes in the likelihood of default.