NEW YORK, April 15 (Reuters) - 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, see [ID:nN13392097]
Reporting by Karen Brettell; Editing by Chizu Nomiyama