Cloud 9fin

Ever signed up for a subscription, forgotten about it, and then been charged $100 a year later because it’s auto-renewed? Imagine doing the same, except add a few zeroes.
In this episode of Cloud 9fin, David Hahn of Davis Polk talks to reporters Tom Quinn and Yiwen Lu about the emergence of snooze/lose clauses in the US credit market: how they work (and crucially, how they work differently to Europe) and their impact on US voting mechanics.
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All eyes were on Ardagh’s CDS after Arini challenged its senior unsecured notes being included in the final list of deliverable obligations to settle contracts.
The fund manger argued that, because the bonds had already been marked to be equitised as of the CDS trigger date (when the restructuring was both effective and binding) then their outstanding principal balance should be zero — since they effectively no longer existed. Arini went on to claim that any finding that the bonds still had a non-zero OPB would turn them it into “Schrödinger’s Obligations” — existing in two incompatible states at once.
Tresidor and Laurion (the latter advised by Milbank) then joined the fight by issuing counter challenges defending the inclusion of the notes.
The challenge was eventually rejected by the EMEA Credit Derivatives Determinations Committee in a split vote, with Citi and Pimco dissenting on the decision. That result means SUNs will be included, and so Ardagh’s equity valuation will influence the final payout as part of an alternative asset package delivery mechanism to replace the bonds.
This hotly contested debate followed the DC having failed to achieve a supermajority ruling on the credit event trigger in the first place, which meant it had to call upon an external review panel of the International Swaps and Derivatives Association. The panel of KCs determined the September tigger date, from which CDS contracts must pay out to protection holders, but did not specify how that payout would be handled at auction.
In this episode of Distressed Diaries, our host, senior distressed reporter Bianca Boorer, sits down with 9fin editor and our resident CDS expert Dan Alderson to go through the ins and outs of this rejected challenge and what it means for the CDS market as a whole.

In this episode of Cloud 9fin, our global head of Distressed and Levfin, Max Frumes, talks with Latin America editor Xóchitl Herrer about a potential workout of Venezuela's sovereign and sub-sovereign debt, following the US-led extraction of president Nicolás Maduro. They provide an overview of the claims against the South American country, the barriers to a quick restructuring deal, and whether Venezuela will be able to gain access to funding without one.
Find all our coverage on Venezuela at 9fin.com.
Have any feedback on the podcast? Send us a note at [email protected] and [email protected] — thanks for listening!

In this episode of Jane’s LME Addiction, our head of LME coverage Jane Komsky brings in Josh Brody and Kenneth Reinker from Cleary Gottlieb to discuss the Optimum Communications fka Altice USA antitrust litigation related to cooperation agreements. They provide an overview of the litigation and discuss the likelihood of success, the pitfalls of certain arguments, and whether this litigation is likely to impact how co-ops are formed.
Find all our coverage on co-ops and LMEs at 9fin.com.
Have any feedback on the podcast? Send us a note at [email protected] — thanks for listening!

Welcome back, Cloud 9fin listeners! To bring in the new year, 9fin’s Asia editor Richard Macauley and US deputy editor Sasha Padbidri kick off our first-ever Asia podcast by unpacking the first successful use of the cross-class cramdown provision in GP APAC’s restructuring — a move that established a legal milestone for Singapore’s restructuring and insolvency framework.
For more details, check out the full story here.
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