CDS holders get a welcome few dollars more on the $3 bln Greek CDS outstanding for which an auction will now be held on March 19 or the Tuesday after the Alabama and Mississipi votes for GOP candidates,. The CDS paypout decision was made after the event, when Greek government concluded the exchange enforcement offer as completed , enforcing new CACs which were not on the original covenant.
Investors still feel CDS should have riggered even earlier bu thte bondoholder banks equally represented on ISDA and thru IIF , are not complaining, following the letter of the law as required and letting the Determinations Committee meet twice after the CAC was added and after the exchange was completed using the CACs
The low outstanding notional markets are what undermines the applicability of CDS as protection on the bonds they cover whether by sovereign or by industry. Liquid CDS such as ones on better Credit like even the more fortunate banks would come slowly into a better demand perspective building volumes in the market, just like it was when the CDS was introduced in the nineties.