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Feb 04, 2013

Nationalisation of SNS REAAL: The CDS Consequences

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On Friday, February 1, the Netherlands nationalised SNS REAAL, the fourth-largest systemically important bank in the Netherlands, at a cost to the Dutch taxpayer of EUR 3.7bn. Unusually, in addition to expropriating SNS REAAL’s shares, the Dutch state has also expropriated all subordinated bonds issued by SNS REAAL.

The nationalisation brings into question how a Credit Default Swap (CDS) entered into by any bondholder to provide credit protection will operate in the event those bonds are expropriated.

View full memo, "Nationalisation of SNS REAAL: The CDS Consequences"

Authors and Contributors

Patrick Clancy

Partner

Finance

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+44 20 7655 5878

London

James Duncan

Partner

Finance

+44 20 7655 5757

+44 20 7655 5757

London

Donna Parisi

Partner

Derivatives & Structured Products

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+1 212 848 7367

New York

Geoffrey Goldman

Partner

Derivatives & Structured Products

+1 212 848 4867

+1 212 848 4867

New York

Azam Aziz

Partner

Derivatives & Structured Products

+1 212 848 8154

+1 212 848 8154

New York