Some news on the GGP debt front. It looks like those that issued credit default swaps on Rouse Co. debt will be on the hook for a hefty chunk of cash--$7.2 million per $10 million of insurance sold.
Credit default swaps insuring the debt of The Rouse Company, a subsidiary of General Growth Properties Inc., are worth around 28.25 percent of the debt they insure, based on initial results of an auction on Tuesday to determine the contracts' value, said auction administrators Creditex and Markit.
That means that sellers of protection will need to pay out around 71.75 percent of the value of the bonds they insured, or $7.17 million per $10 million of insurance sold. Credit default swaps are used to insure against a borrower defaulting.
Payments on the contracts were triggered after the company failed to pay more than $2 billion in debt due on March 16.