The State Office for Technology said the company hired to do the work, M/A-COM, a subsidiary of Tyco Electronics, had defaulted on the contract because the first installation of the system, near Buffalo, had failed three tests since last September.
The catch is that the Dolphins can get back the prorated portion of the $5 million if Madison defaults on the contract.
In October, Governor Rowland declared Envirotest in default of the $2.2 million contract, citing several problems, including the arrest of seven employees on bribery charges.
KBC claimed that the WMATA was in technical default of a contract following the collapse of AIG, which had guaranteed the loan that KBC made to WMATA in 2002.
On February 2 , 2004 the government delivered notice to 407 ETR that they are considered to be in default of their contract because of 407 ETR's decision to raise toll rates without first obtaining provincial clearance.
Industry officials, however, have argued that while the total amount of credit-default swaps appears large, many of the contracts offset one another.
Fannie Mae holds derivatives to maturity, it said, meaning its risk is mainly that of a default, not quarterly changes in the value of the contracts.
But one of the challenges facing participants in the credit default swap market is that the market value amount of the contracts outstanding far exceeds the $5.7 trillion of the corporate bonds whose defaults the swaps were created to protect against.
Berkshire will have to pay on some of the contracts if certain United States entities default on their credit.
Since the counterparty of the replacement contract could also default within the lifetime of an existing contract, ignoring the possibility of counterparty defaults of replacement contracts will either under or over estimate the cost of the risk.
