The auction set for Nov. 20 to determine the value for credit default swaps on CIT Group may be the largest to date, and participation by banks with exposure to the troubled lender may could elevate bond prices and raise the valuations on the swaps, Reuters reports. At stake are net volumes of some $3.1 billion in single-name CDS, with an additions $2.9 billion in trades based on indices in which CIT is included. Barclays analysts said banks that were counterparties to CDOs that included CIT may provide a large bid for the bonds, and that could drive up the CDS valuations. In addition, strong demand from banks could raise the final CDS price by 2.5 points to 4 points. On Wednesday, CIT’s bond traded at between 66 cents and 70 cents on the dollar.

Click here to read the story from Reuters