This morning, ISDA decided that the inclusion of a collective action clause and the subordination of private sector bonds to bonds held by the European Central Bank and European national central banks had not triggered a credit event.
PIMCO’s Bill Gross expressed dismay at this decision, telling Reuters that the decision set a dangerous precedent.
He pointed out that PIMCO is actually on the ISDA committee that ruled on the issue—and in fact voted against the decision to trigger a credit event!
Check out the memorandum:
So who should we believe? PIMCO or PIMCO? Needless to say, we’re confused (and laughing).