Template:Nutshell 2016 CSA 5(c)(ii)

5(c)(ii) Interest Payment (VM). Subject to Paragraph 11(g)(iv):

5(c)(ii)(A) if “Interest Transfer” applies the Interest Payer (VM) must transfer an Interest Payment (VM) to the Interest Payee (VM), as required under Paragraph 11(g)(ii) and on any Early Termination Date provided that if “Interest Payment Netting” applies:

(I) if the Interest Payer (VM) is due a payment under the VM CSA on the same date:

(a) it will be reduced by the Interest Payment (VM) (but not below zero), provided that for a Return Amount (VM), the deduction will only apply to the extent of any Base Currency cash portion of the Credit Support Balance (VM); and

(b) after any such reduction the Interest Payer (VM) must transfer the remaining Interest Payment (VM) to the Interest Payee (VM);

(II) following such a reduction, when working out the Credit Support Balance (VM), the Transferee will be deemed to have received or transferred the Base Currency cash equivalent of the reduced amount, on the due date for the Interest Payment (VM); and

5(c)(ii)(B) if “Interest Adjustment” applies the Credit Support Balance (VM) will be adjusted by the Transferee, as required under Paragraph 11(g)(ii) and on any Early Termination Date, as follows:

(I) if the Interest Amount (VM) is positive, it will be added in the Base Currency to the Credit Support Balance (VM); and

(II) if the Interest Amount (VM) is negative, its absolute value in the Base Currency will be deducted from the Credit Support Balance (VM), provided that if the Base Currency cash portion of the Credit Support Balance (VM) is less than that absolute value, the reduction will be limited to that Base Currency cash and the Transferor must transfer the remainder to the Transferee on the due date.