Lehman Credit Default Payout Could Set Record

Law360, New York (October 10, 2008, 12:00 AM EDT) -- Sellers of credit default protection on Lehman Bros. Holdings Inc. will reportedly pay out just over 91 cents on the dollar after an auction Friday to settle trades across the market related to the failed investment bank.

The recovery rate for defaults on Lehman's senior debt was set at 8.625 cents on the dollar, according to results auction administrators posted on creditfixings.com. Banks and others that sold insurance on the defaulted bonds would have to pay the remaining 91.375 cents on the dollar.

The auction could...
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