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Markit To Hold Auction For Tribune’s LCDS, CDS Trades

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Following Tribune’s Chapter 11 filing, Markit has began corralling the loan-only credit default swap market by arranging an auction that would settle LCDS trades on the now bankrupt newspaper giant.

The auction terms, including the date, will be determined by Markit LCDX dealers. The rules can be found on the International Swaps and Derivatives Association’s Web site.

Markit and Creditex are the official administrators of such auctions. A separate auction will be held to settle the credit default swap trades on Tribune. The date for that auction has yet to be determined, but will be posted on the Markit Creditex Web site.

LCDS and CDS auctions began in 2005, through a collaboration with ISDA and major credit derivative dealers.

Auctions have been held to settle credit derivative trades on Masonite, Kaupthing Banki, Glitnir Banki, Landsbanki Islands, Washington Mutual, Lehman Brothers Holdings, Federal National Mortgage Association, Federal Home Loan Mortgage Corp., Tembec Industries, Quebecor World, Movie Gallery, Collins & Aikman, Delta Air Lines, Northwest Airlines, Delphi Corp., Calpine Corp., Dana Corp. and Dura.

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