Federal District Court Invalidates Purported Terminations of Credit Default Swaps by Bond Insurer

On June 11, 2008, in a one-page order, the US District Court for the Southern District of New York ruled that Merrill Lynch International did not repudiate its obligations under seven credit default swaps with affiliates of bond insurer XL Capital Assurance Inc. with a notional value of $3.1 billion, and that XL’s purported terminations of those credit default swaps were without effect.

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