Chrysler Holdouts Own No CDS on Chrysler

A group of dissident Chrysler bondholders opposing the Obama administration's restructuring plan—which refers to itself as the Chrysler Non-TARP Lenders—disclosed this interesting fact in a court filing yesterday:

4. None of the Chrysler Non-TARP Lenders hold any credit default swaps or hedges with respect to their holdings of Senior Debt.

There are 9 funds in the group, holding a combined $295 million of senior Chrysler debt. So of the 20 holdout Chrysler creditors, we now know that roughly half of them owned no CDS on Chrysler.

Ryan Grim of the Huffington Post wrote a ridiculous article on Tuesday claiming that the holdout creditors may have pushed Chrysler into bankruptcy in order to collect payouts on CDS positions. Grim—evidently unaware that AIG almost never wrote CDS on individual companies—also claimed that the holdout creditors' CDS "were likely mostly issued by AIG." If you're ever arguing with someone about the financial crisis, and it seems like you're arguing about completely different crises, articles like this are the reason why.