International Association for swap and derivatives ISDA decided unanimously that the activation of collective action clauses for the Greek debt restructuring is a credit event. This means that all holders of CDS insurance against failure of Greece will receive compensations. The meeting of the Association Committee was held in London and continued for over 6 hours, but the decision was taken unanimously, and the argument was that the activation of the collective action clauses CACs makes restructuring mandatory and not voluntary.
There are 4323 insurance policies against the failure of Greece issued throughout the world worth over 3.16 billion dollars. They will probably, however not be fully paid but only partly because the holders of Greek government bonds will not lose their full value, but only a part of it.
Payment of insurance does not happen automatically. The International Association for the swap and derivatives has scheduled an auction for the insurance for 19th March.