Delivery and payment obligations following Event of Default - GMSLA Provision: Difference between revisions
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=== | ===Multi-level [[set-off]]=== | ||
Paragraph 11.2(b) sets up a [[set-off]] of amounts due under the {{gmsla}} to create a [[single net payment]] due under the {{gmsla}} in respect of all terminated transactions. The {{gmslaprov|Non-defaulting Party}} can, in turn, set that net sum off against amounts owed to or by the {{gmslaprov|Defaulting Party}} under ''other'' agreements (such as an {{isdama}}. | |||
{{Seealso}} | |||
* [[Netting under a GMSLA]]. |
Revision as of 16:46, 8 March 2018
GMSLA Anatomy™
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11.2 in a Nutshell™ (GMSLA edition)
11.2 Acceleration: The Parties’ obligations will be accelerated as at the Event of Default (the Termination Date) as follows:
- (a) The Non-Defaulting Party will determine the Default Market Value of all amounts (and securities) due by each Party under paragraph 11.4 as at the Termination Date.
- (b) Using those values, [the Non-Defaulting Party will determine and notify][1]what each Party owes as at the Termination Date, converting into the Base Currency at the Spot Rate where necessary, and will set those sums off against each other. The Party owing the greater amount must pay the difference on the Business Day after notification.
- (c) and (d) [(d) being the vice-versa] If that balance is payable by a Party who had delivered a Letter of Credit to the other Party the other Party must draw on the Letter of Credit to settle the amount due and then deliver it for cancellation.
Multi-level set-off
Paragraph 11.2(b) sets up a set-off of amounts due under the 2010 GMSLA to create a single net payment due under the 2010 GMSLA in respect of all terminated transactions. The Non-defaulting Party can, in turn, set that net sum off against amounts owed to or by the Defaulting Party under other agreements (such as an ISDA Master Agreement.
See also
- ↑ Well, we assume it will be the NDP: the 2010 GMSLA rather brilliantly puts it into an unattributed passive, as if God is going to to it, or it will magically happen by itself. Go, ISLA’s crack drafting squad™.