NEW YORK, April 15 Credit default swaps
insuring the debt of The Rouse Company, a subsidiary of General
Growth Properties Inc (GGP.N), 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.
A group of General Growth's bondholders have asked their
trustee to sue the mall owner for payment on their past-due
bonds, the Wall Street Journal reported on Monday. For details,
(Reporting by Karen Brettell; Editing by Chizu Nomiyama)