March 31, 2009 / 6:27 PM / in 9 years

Station Casinos CDS worth 32 percent in auction

NEW YORK, March 31 (Reuters) - Credit default swaps insuring the debt of Station Casinos Inc STN.UL were found to be worth 32 percent of the amount of debt they insure in an auction on Tuesday to determine the contracts’ value, said auction administrators Creditex and Markit.

That means that sellers of protection will need to pay out 68 percent of the value of the bonds they insured, or $6.8 million per $10 million of insurance sold. Credit default swaps are used to insure against a borrower defaulting.

Payments on the contracts were triggered after the casino operator failed to make an interest payment on its bonds within 30 days of missing the payment on Feb. 1. Net volumes of around $242 million are outstanding in Station Casinos’ credit default swaps, according to data by the Depository Trust & Clearing Corp. (Reporting by Karen Brettell; Editing by James Dalgleish)

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