Template:Nutshell EUA Annex Receiving Party’s Replacement Cost: Difference between revisions

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::(A)
::(A)
:::(I) the price (per {{euaprov|Allowance}}) {{euaprov|Calculation Agent}} determines that {{euaprov|Receiving Party}} would pay in a reasonable arm’s length transaction on the {{euaprov|Final Delivery Date}} for an [[equivalent]] number of {{euaprov|Allowances}} to be delivered on the {{euaprov|Delivery Business Day}} on which {{euaprov|Allowances}} would be ordinarily be delivered under a spot transaction on the {{euaprov|Final Delivery Date}}; less
:::(I) the price (per {{euaprov|Allowance}}) {{euaprov|Calculation Agent}} determines that {{euaprov|Receiving Party}} would pay in a reasonable arm’s length transaction on the {{euaprov|Final Delivery Date}} for an [[equivalent]] number of {{euaprov|Allowances}} to be delivered on the {{euaprov|Delivery Business Day}} on which {{euaprov|Allowances}} would be ordinarily be delivered under a spot transaction on the {{euaprov|Final Delivery Date}}; less
:::(II) the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}} plus, where the termination under “Physical Settlement” occurs after a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
:::(II) the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}} plus, where the termination under “{{euaprov|Physical Settlement}}” follows a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
::(B) the {{euaprov|RPRC Shortfall}}; plus
::(B) the {{euaprov|RPRC Shortfall}}; plus
::(C) interest at the {{euaprov|Default Rate}} from the {{euaprov|Delivery Date}} to the termination date in accordance with “{{euaprov|Failure to Deliver Not Remedied}}” on the product of the {{euaprov|RPRC Shortfall}} and any excess of the price determined under to paragraph (1)(A)(I) over the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}; or
::(C) interest at the {{euaprov|Default Rate}} from the {{euaprov|Delivery Date}} to the termination date in accordance with “{{euaprov|Failure to Deliver Not Remedied}}” on the product of the {{euaprov|RPRC Shortfall}} and any excess of the price determined under to paragraph (1)(A)(I) over the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}; or
:(2) '''{{euaprov|Excess Emissions Penalty}}''': If “{{euaprov|Excess Emissions Penalty}}” applies and {{euaprov|Delivery Date}} falls within the relevant {{euaprov|EEP Risk Period}}, then, for a failure to deliver a number of {{euaprov|Allowances}} (the “{{euaprov|Undelivered Allowances}}”), an amount equal to the sum of:
:(2) '''{{euaprov|Excess Emissions Penalty}}''': If “{{euaprov|Excess Emissions Penalty}}” applies and {{euaprov|Delivery Date}} falls within the relevant {{euaprov|EEP Risk Period}}, then, for a failure to deliver a number of {{euaprov|Allowances}} (the “'''{{euaprov|Undelivered Allowances}}'''”), an amount equal to the sum of:
::(A) either:
::(A) either:
:::(I) if  {{euaprov|Receiving Party}} can reasonably purchase a number of {{euaprov|Allowances}} for delivery between the {{euaprov|Final Delivery Date}} and the {{euaprov|Reconciliation Deadline}} immediately following the {{euaprov|Delivery Date}} (the “'''{{euaprov|Buy-In Period'}}''”), which for each such individual purchase of {{euaprov|Allowances}}, in aggregate equalling the number of {{euaprov|Undelivered Allowances}}:
:::(I) if  {{euaprov|Receiving Party}} can reasonably purchase a number of {{euaprov|Allowances}} for delivery between the {{euaprov|Final Delivery Date}} and the {{euaprov|Reconciliation Deadline}} immediately following the {{euaprov|Delivery Date}} (the “'''{{euaprov|Buy-In Period}}'''”), which for each such individual purchase of {{euaprov|Allowances}}, in aggregate equalling the number of {{euaprov|Undelivered Allowances}}:
::::(X)  
::::(X)  
:::::(1) the price (per Allowance) at which {{euaprov|Receiving Party}} is able so to purchase the relevant number of Allowances; less  
:::::(1) the price (per Allowance) at which {{euaprov|Receiving Party}} is able so to purchase the relevant number of Allowances; less  
:::::(2)  
:::::(2)  
::::::(A) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus
::::::(A) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus
::::::(B) Where the termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
::::::(B) Where the termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” follows a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
::::(Y) the affected number of {{euaprov|Allowances}}; plus
::::(Y) the affected number of {{euaprov|Allowances}}; plus
::::(Z) interest at the {{euaprov|Default Rate}} from the {{euaprov|Delivery Date}} to the termination date under “{{euaprov|Failure to Deliver Not Remedied}}” on the product of the number of {{euaprov|Undelivered Allowances}} and any excess of the price determined above over the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}; or
::::(Z) interest at the {{euaprov|Default Rate}} from the {{euaprov|Delivery Date}} to the termination date under “{{euaprov|Failure to Deliver Not Remedied}}” on the product of the number of {{euaprov|Undelivered Allowances}} and any excess of the determined price over the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}; or
:::(II) if  {{euaprov|Receiving Party}} cannot reasonably purchase a number of {{euaprov|Allowances}} for delivery [[equivalent]] to the {{euaprov|Undelivered Allowances}} during the {{euaprov|Buy-In Period}}:
:::(II) if  {{euaprov|Receiving Party}} cannot reasonably purchase a number of {{euaprov|Allowances}} for delivery equal to the {{euaprov|Undelivered Allowances}} during the {{euaprov|Buy-In Period}}:
::::(X) for the number of Allowances for which {{euaprov|Receiving Party}} is able to effect a Buy-In during the Buy-In Period, an amount for such Allowances calculated in accordance with paragraph (I) above; and
::::(X) for the number of {{euaprov|Allowances}}  {{euaprov|Receiving Party}} can {{euaprov|Buy-In}} during the {{euaprov|Buy-In Period}}, an amount determined under paragraph (I) above; and
::::(Y) for a number of Allowances equal to the number of {{euaprov|Undelivered Allowances}} minus the number of Allowances referred to in (II)(X) above (the “'''{{euaprov|Shortfall}}'''”), the sum of:
::::(Y) for a number equal to the {{euaprov|Undelivered Allowances}} minus the {{euaprov|Allowances}} referred to in (II)(X) above (the “'''{{euaprov|Shortfall}}'''”), the sum of:
:::::(a)
:::::(a)
::::::(I) the price (per Allowance) at which {{euaprov|Receiving Party}}, using its reasonable efforts and in an arm’s length transaction, is able to purchase as soon as reasonably possible for delivery after the {{euaprov|Reconciliation Deadline}} a number of Allowances (such Allowances also being of the same {{euaprov|Allowance Type}}  equal to the {{euaprov|Shortfall}}; less
::::::(I) the price (per Allowance) at which {{euaprov|Receiving Party}} can reasonably buy for delivery after the {{euaprov|Reconciliation Deadline}} a number of equivalent Allowances equal to the {{euaprov|Shortfall}}; less
::::::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, for the {{euaprov|Undelivered Allowances}} set out in the relevant Confirmation plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; plus
::::::(II) the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}} for the {{euaprov|Undelivered Allowances}}, where the relevant termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” follows a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; plus
::::::(III) the {{euaprov|EEP Amount}}; multiplied by:
::::::(III) the {{euaprov|EEP Amount}}; multiplied by:
:::::(b) the {{euaprov|Shortfall}}; plus
:::::(b) the {{euaprov|Shortfall}}; plus
:::::(c) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the date {{euaprov|Receiving Party}} is or would be able to purchase Allowances in accordance with paragraph (II)(Y)(a)(1) above on an amount equal to the product of the number of {{euaprov|Undelivered Allowances}} and an amount equal to the excess, if any, of the price determined pursuant to paragraph (II)(Y)(a)(1) above over the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable; and
:::::(c) interest at the {{euaprov|Default Rate}} from the {{euaprov|Delivery Date}} to the date {{euaprov|Receiving Party}} could purchase {{euaprov|Allowances}} under paragraph (II)(Y)(a)(1) on an amount equal to the the number of {{euaprov|Undelivered Allowances}} and any excess of the price determined under paragraph (II)(Y)(a)(1) over the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}; and
::(B) such reasonable costs and expenses which {{euaprov|Receiving Party}} incurs as a direct result of Delivering Party’s failure to deliver the {{euaprov|Shortfall}} to the extent that those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or
::(B) {{euaprov|Receiving Party}}’ reasonable costs as a direct result of {{euaprov|Delivering Party}}’s failure to deliver the {{euaprov|Shortfall}} where those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or
:(3) if “{{euaprov|Failure to Deliver (Alternative Method)}}” is specified to be applicable in the Annex to this Part [7] or the Confirmation for an {{euaprov|EU Emissions Allowance Transaction}}, then, for a failure to deliver a number of Allowances (the number of Allowances not so delivered being the “{{euaprov|RPRC Shortfall}}”), an amount equal to:
:(3) '''{{euaprov|Failure to Deliver (Alternative Method)}}''': If “{{euaprov|Failure to Deliver (Alternative Method)}}” applies then, for a failure to deliver a number of {{euaprov|Allowances}} (“'''{{euaprov|RPRC Shortfall}}'''”), an amount equal to:
::(A)
::(A)
:::(I) the price (per Allowance) {{euaprov|Receiving Party}}, acting in a commercially reasonable manner, does or would, in the determination of the Calculation Agent, pay in an arm’s length transaction concluded in accordance with prevailing market practice on the {{euaprov|Final Delivery Date}} to purchase a number of Allowances equivalent to the {{euaprov|RPRC Shortfall}} for delivery on the first {{euaprov|Delivery Business Day}} on which transactions concluded on the {{euaprov|Delivery Date}} would be settled in accordance with prevailing market practice; less
:::(I) the price (per Allowance) the Calculation Agent determines that {{euaprov|Receiving Party}} can reasonably buy a number of equivalent Allowances equal to the {{euaprov|RPRC Shortfall}} for delivery on the first standard {{euaprov|Delivery Business Day}} for settling transactions concluded on the {{euaprov|Delivery Date}}; less
:::(II) the {{euaprov|Allowance Purchase Price}} or {{euaprov|Allowance Strike Price}}, as applicable, as set out in the Confirmation for such {{euaprov|EU Emissions Allowance Transaction}} plus, in those circumstances in which the relevant termination of the parties’ obligations under “Physical Settlement” occurs following a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
:::(II) the relevant specified {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}} plus, where termination of the parties’ obligations under “{{euaprov|Physical Settlement}}” follows a {{euaprov|Suspension Event}}, the {{euaprov|Close-out Cost of Carry Amount}}; multiplied by:
::(B) the {{euaprov|RPRC Shortfall}}; plus
::(B) the {{euaprov|RPRC Shortfall}}; plus
::(C) interest at the Default Rate for the period from (and including) the {{euaprov|Delivery Date}} to (but excluding) the {{euaprov|Final Delivery Date}} on an amount equal to the product of the {{euaprov|Allowance Purchase Price}} or the {{euaprov|Allowance Strike Price}}, as applicable, and the {{euaprov|RPRC Shortfall}}. <br>
::(C) interest at the Default Rate from the {{euaprov|Delivery Date}} to the {{euaprov|Final Delivery Date}} on the product of the relevant {{euaprov|Allowance Purchase Price}}/{{euaprov|Allowance Strike Price}}, and the {{euaprov|RPRC Shortfall}}. <br>

Latest revision as of 11:02, 13 July 2022

Receiving Party’s Replacement Cost means:

(1) No Excess Emissions Penalty: If “Excess Emissions Penalty” does not apply or the Delivery Date falls outside the EEP Risk Period, then, for a failure to deliver a number of Allowances (the “RPRC Shortfall”), an amount equal to:
(A)
(I) the price (per Allowance) Calculation Agent determines that Receiving Party would pay in a reasonable arm’s length transaction on the Final Delivery Date for an equivalent number of Allowances to be delivered on the Delivery Business Day on which Allowances would be ordinarily be delivered under a spot transaction on the Final Delivery Date; less
(II) the relevant Allowance Purchase Price/Allowance Strike Price plus, where the termination under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:
(B) the RPRC Shortfall; plus
(C) interest at the Default Rate from the Delivery Date to the termination date in accordance with “Failure to Deliver Not Remedied” on the product of the RPRC Shortfall and any excess of the price determined under to paragraph (1)(A)(I) over the relevant Allowance Purchase Price/Allowance Strike Price; or
(2) Excess Emissions Penalty: If “Excess Emissions Penalty” applies and Delivery Date falls within the relevant EEP Risk Period, then, for a failure to deliver a number of Allowances (the “Undelivered Allowances”), an amount equal to the sum of:
(A) either:
(I) if Receiving Party can reasonably purchase a number of Allowances for delivery between the Final Delivery Date and the Reconciliation Deadline immediately following the Delivery Date (the “Buy-In Period”), which for each such individual purchase of Allowances, in aggregate equalling the number of Undelivered Allowances:
(X)
(1) the price (per Allowance) at which Receiving Party is able so to purchase the relevant number of Allowances; less
(2)
(A) the Allowance Purchase Price or Allowance Strike Price, as applicable, for the Undelivered Allowances set out in the relevant Confirmation plus
(B) Where the termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:
(Y) the affected number of Allowances; plus
(Z) interest at the Default Rate from the Delivery Date to the termination date under “Failure to Deliver Not Remedied” on the product of the number of Undelivered Allowances and any excess of the determined price over the relevant Allowance Purchase Price/Allowance Strike Price; or
(II) if Receiving Party cannot reasonably purchase a number of Allowances for delivery equal to the Undelivered Allowances during the Buy-In Period:
(X) for the number of Allowances Receiving Party can Buy-In during the Buy-In Period, an amount determined under paragraph (I) above; and
(Y) for a number equal to the Undelivered Allowances minus the Allowances referred to in (II)(X) above (the “Shortfall”), the sum of:
(a)
(I) the price (per Allowance) at which Receiving Party can reasonably buy for delivery after the Reconciliation Deadline a number of equivalent Allowances equal to the Shortfall; less
(II) the relevant Allowance Purchase Price/Allowance Strike Price for the Undelivered Allowances, where the relevant termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; plus
(III) the EEP Amount; multiplied by:
(b) the Shortfall; plus
(c) interest at the Default Rate from the Delivery Date to the date Receiving Party could purchase Allowances under paragraph (II)(Y)(a)(1) on an amount equal to the the number of Undelivered Allowances and any excess of the price determined under paragraph (II)(Y)(a)(1) over the relevant Allowance Purchase Price/Allowance Strike Price; and
(B) Receiving Party’ reasonable costs as a direct result of Delivering Party’s failure to deliver the Shortfall where those costs and expenses are not reflected in paragraphs (A)(I) or (A)(II) above; or
(3) Failure to Deliver (Alternative Method): If “Failure to Deliver (Alternative Method)” applies then, for a failure to deliver a number of Allowances (“RPRC Shortfall”), an amount equal to:
(A)
(I) the price (per Allowance) the Calculation Agent determines that Receiving Party can reasonably buy a number of equivalent Allowances equal to the RPRC Shortfall for delivery on the first standard Delivery Business Day for settling transactions concluded on the Delivery Date; less
(II) the relevant specified Allowance Purchase Price/Allowance Strike Price plus, where termination of the parties’ obligations under “Physical Settlement” follows a Suspension Event, the Close-out Cost of Carry Amount; multiplied by:
(B) the RPRC Shortfall; plus
(C) interest at the Default Rate from the Delivery Date to the Final Delivery Date on the product of the relevant Allowance Purchase Price/Allowance Strike Price, and the RPRC Shortfall.