Masonite loan CDS to be settled by auction -Markit

NEW YORK, Nov 19 (Reuters) - Dealers in the Markit loan credit default swap index have voted to conduct a credit event auction to settle loan credit derivative trades on Masonite International, Markit said late on Tuesday.

The auction terms, including the date, will be determined by Markit LCDX dealers according to rules published on the International Swaps and Derivatives Association website during the next few weeks, financial information company Markit said.

Payments on Masonite's loan credit default swaps were triggered after Masonite failed to make an interest payment due on Oct. 15 by the end of a grace period on Nov. 15, market sources said.

Masonite, a Canadian door maker struggling to avoid bankruptcy, said on Monday it reached a forbearance agreement with most of its bondholders that will give it additional time to restructure its debt load.

Masonite is a constituent of the Markit LCDX index.

Markit and Creditex, a company that executes and processes credit derivative trades, are the administrators of credit event auctions that have been used to settle trades referencing Washington Mutual, Lehman Brothers, Delphi Corp and other major companies. (Reporting by Dena Aubin; Additional reporting by Karen Brettell; Editing by James Dalgleish)