UPDATE 2-B&B senior, subordinated CDS payment triggered

* B&B failure to pay interest determined as a credit event

* Possible implications for other lenders including N. Rock

* Auctions on both senior and subordinated CDS

(Adds confirmation of auctions by ISDA)

By Natalie Harrison

LONDON, July 9 (Reuters) - A credit derivatives committee has ruled that the non-payment of interest on Tier 2 bonds by British mortgage lender Bradford & Bingley (BB_p.L) will trigger payment under credit default swap contracts, the International Swaps and Derivatives Association said on Thursday.

B&B (BB_p.L) said in late May it would not pay coupons on 325 million pounds ($534 million) of Tier 2 bonds, due June 16, June 30, and July 20 and traders last week said a grace period had expired on the first payment.

ISDA said on its web site (www.isda.org) on Thursday that all 15 members of the EMEA Credit Determinations Committee have now agreed that a credit event had occurred on June 30 due to failure to pay interest on the bonds.

An auction will now soon take place to determine how much sellers of protection on Bradford & Bingley senior and subordinated CDS will have to pay out, ISDA said. The auction will be administered by Markit and Creditex.