CDS update: Euphoria fades

"Markit and Credit released the results of the Glitnir auction. The final price for the Icelandic bank’s subordinated debt for the purpose of settling credit derivative transactions is 0.125 per cent, while senior debt settled at 3 per cent. In other words, banks and hedge funds that sold protection on Glitnir’s subordinated debt will have to pay out virtually 100 per cent of their net notional exposure, and 97 per cent of their exposure to CDS written on senior debt."