Counterparty Wells Fargo has so far refused to lower the rating threshold for three Chicago swaps that reached termination events through recent downgrades, Bond Buyer reported yesterday. Though it hasn't changed the threshold, Wells Fargo has not demanded, by designating an early termination date, that the city make an estimated payment of $38 million based on a recent negative mark-to-market valuation. The bank is now allowed to do so under the automatic termination event triggered by the city's recent downgrade from Moody's Investors Service but is giving the city time to resolve its swaps dilemma even as it's refused to lower the rating threshold as requested.
