But the happy outcome owes much to mere chance. It masks flaws in the contracts, say some market participants and legal experts, that have rattled investors and are leading to calls to revamp how the swaps are handled for defaulting sovereign nations. (…)
By happenstance, some of the new bonds Greece has issued in its restructuring have a market price close to the total value of the package creditors received—about 22 cents on the euro. Those bonds will help set the CDS payout, and trouble will be averted: CDS holders will receive about 78 cents, roughly equivalent to the loss bondholders suffered.