Cross acceleration - ISDA Provision: Difference between revisions
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
Cross acceleration is not an actual ISDA term, but is what happens to an ISDA Section {{isdaprov|5(a)(vi)}} {{isdaprov|Cross Default}} if you can persuade your credit department to water it down to something sensible.'' | {{a|isda|{{subtable|'''In a {{nutshell}}'''<br> | ||
===Cross acceleration | {{Nutshell 2002 ISDA 5(a)(vi)}}}} | ||
{{subtable|'''In full'''<br> | |||
{{ISDA Master Agreement 2002 5(a)(vi)}} | |||
}}}}Cross acceleration is not an actual ISDA term, but is what happens to an ISDA Section {{isdaprov|5(a)(vi)}} {{isdaprov|Cross Default}} if you can persuade your credit department to water it down to something sensible.'' | |||
===Cross acceleration: what ''is'' it?=== | |||
{{cross acceleration capsule}} | {{cross acceleration capsule}} | ||
===Amending to {{isdaprov|Cross Default}} to {{isdaprov|cross acceleration}} === | ===Amending to {{isdaprov|Cross Default}} to {{isdaprov|cross acceleration}} === |
Revision as of 15:50, 2 October 2020
|
Cross acceleration is not an actual ISDA term, but is what happens to an ISDA Section 5(a)(vi) Cross Default if you can persuade your credit department to water it down to something sensible.
Cross acceleration: what is it?
Cross acceleration is like cross default, but it only arises when the non-defaulting party has actually accelerated the contract. Therefore it is a higher threshold and a less sensitive trigger, and avoids that weird scenario when the actual creditor has not itself triggered its default rights, but an opportunistic third party holder of a cross default right can jump in and close out anyway (therefore making the benign creditor less likely itself to show leniency for the original default, it being a nasty, brutish and short old world out there).
Amending to Cross Default to cross acceleration
You can amend Cross Default to Cross Acceleration as follows:
- Section 5(a)(vi) is amended by deleting “, or becoming capable at such time of being declared,” from subsection (1).
See also
- Cross default generally