"Even if they reach an agreement there are going to be so many holdouts that then they’ll have a problem. They’ll either pay the holdouts and that becomes expensive, or if they don’t pay them you’ll have a series of defaults, because they’re going to stop paying them. Or the way to avoid the holdouts from being holdouts is then to change domestic legislation, to cram down the terms of the majority on the holdouts. But if that happens then the CDS will trigger and that becomes a credit event. So either way you’re going to get a credit event."
"The credit event can be two forms, either a form of default…another one is if there are holdouts and you don’t pay them and technically that’s a default on the bonds on which you don’t pay so there’s a series of defaults on which you don’t pay. Or three, if you change the terms of the bonds through legislation then that’s considered a credit event by ISDA by the event triggering the CDS. And one way or another you get a credit event. One extreme is a default, another one is CDS triggering."
