Events of Default (Early Termination Payments) - ISDA Provision: Difference between revisions
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{{isdasnap|6(e)(i)}} | {{isdasnap|6(e)(i)}} | ||
==Commentary== | ==Commentary== | ||
Note the effect of this is that all transactions are terminated and the recourse is to a net sum under Section 6(e) of the | Note the effect of this is that all transactions are terminated and the recourse is to a net sum under Section {{isdaprov|6(e)}} of the {{isdama}} - NOT under the {{isdaprov|Transactions}}. Therefore, if your [[credit support]] (particularly [[guarantee]]s or [[LC|letters of credit]]) explicitly references the {{isdaprov|Transaction}}, you may lose any credit support at precisely the point you want to rely on it. Further commentary on the [[Guarantee]] page. | ||
{{isdaanatomy}} | {{isdaanatomy}} | ||
*[[Guarantee]] | *[[Guarantee]] |
Revision as of 09:44, 22 August 2012
In gory detail
1992 ISDA
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Commentary
Note the effect of this is that all transactions are terminated and the recourse is to a net sum under Section 6(e) of the ISDA Master Agreement - NOT under the Transactions. Therefore, if your credit support (particularly guarantees or letters of credit) explicitly references the Transaction, you may lose any credit support at precisely the point you want to rely on it. Further commentary on the Guarantee page.