Holders of credit-default swaps on Greek bonds shouldn't tear uptheir contracts after yesterday's ruling against a payout. TheInternational Swaps & Derivatives Association said the swapshadn't been triggered by the European Central Bank's exchange ofGreek bonds for new securities exempt from losses taken by privateinvestors. The group will now probably be asked to determinewhether collective action clauses, or CACS, being used by Greece toimpel investors to participate in a wider exchange of bonds thatwould trigger the swaps.

“They will have to enforce CACS,” said Alessandro Giansanti, asenior rates strategist at ING Groep NV in Amsterdam. “At thatpoint the exchange will become coercive and that will be arestructuring event for CDS.”

The 130 billion-euro ($170 billion) bailout for Greece istesting the sanctity of the market for credit-default swaps andtheir effectiveness as a hedge against losses on government bonds.Policy makers including former ECB President Jean-Claude Trichethave opposed paying the contracts because they're concerned thattraders will be encouraged to bet against failing nations andworsen Europe's debt crisis.