On May 15, 2009, ISDA announced the launch of the 2009 European Cancelable Form Loan CDS Protocol (the “Protocol”), which amends the Settlement Method provisions of certain existing single-name and index CDS transactions in contracts between adhering parties. The adherence period for the Protocol ran until May 22, 2009.

The Protocol covers two types of CDS transactions, (i) “Covered Legacy Transactions,” which includes CDS transactions entered into under confirmations incorporating either leveraged loan supplements or the iTraxx® LevX® standard terms supplement and (ii) “Covered Edscha Transactions,” which includes CDS transactions that would otherwise be defined as Covered Legacy Transactions but specify Edscha AG as the reference entity. The Protocol amends the terms of Covered Transactions between adhering parties to provide, in certain circumstances, for settlement in accordance with the “Market Settlement Mechanism,” which is the Cancelable ELCDS Auction Settlement Terms published by ISDA and International Index Company Ltd. (or any successor thereto) (or, in the case of Covered Edscha Transactions, the auction settlement terms published on or before May 15, 2009 in respect of transactions referencing certain loan obligations of Edscha AG). For additional information relating to the Protocol, you may refer to the text here.