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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (140895)	10/11/2008 7:28:04 PM
From: geode00	Respond to of 173976

Lehman Bondholders Get Little Insight on Price From CDS Auction By Tiffany Kary Oct. 11 (Bloomberg) -- Lehman Brothers Holdings Inc. bondholders didn't get a clear indication of how much they will recover in the firm's bankruptcy from an auction of insurance on its debt, two analysts said. Yesterday's auction determined that investors who bet on a default of Lehman's debt by buying derivatives called credit- default swaps should get 91.375 cents on their dollar. The price was set by auction administrators Creditex Group Inc. and Markit Group Ltd., with 14 financial institutions bidding. That figure was calculated based on an ``inside market midpoint'' price of 8.625 cents on the dollar for Lehman's debt. The auction has little to do with what bondholders will recover once Lehman's bankruptcy, filed Sept.15, has been fought out in court by creditors, said Matt Dundon, managing director of distressed analysis at Miller Tabak Roberts Securities. ``I take very little directionality on the ultimate value of the bonds from the CDS auction,'' Dundon said..... Some of that protection may be delivered to parties that are involved as creditors in the case. Creditors aren't required to disclose whether they hold insurance on bonds, which has been a contentious topic in bankruptcy law. Concerns include creditors who could get more than 100 cents on their dollar if they held insurance and got a recovery in the case..... bloomberg.com So, in this case it seems that the insurance is working in that the money is being paid on the claim. So does that mean in this case the market is working properly?