Template:Nutshell GMSLA 11.3: Difference between revisions

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{{gmslaprov|11.3}} The '''{{gmslaprov|Default Market Value}}''' of a {{gmslaprov|Letter of Credit}} will be zero. For any {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or any other {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} it will be determined under paragraphs {{gmslaprov|11.4}} to {{gmslaprov|11.6}} below, where:
{{gmslaprov|11.3}} The '''{{gmslaprov|Default Market Value}}''':
:'''{{gmslaprov|Appropriate Market}}''' is the most appropriate market for any securities determined by the {{gmslaprov|Non-Defaulting Party}};
*of a {{gmslaprov|Letter of Credit}} will be zero  
:'''{{gmslaprov|Default Valuation Time}}''' means the {{gmslaprov|Close of Business}} in the {{gmslaprov|Appropriate Market}} on the fifth dealing day after the {{gmslaprov|Event of Default}} (or where {{gmslaprov|Automatic Early Termination}} applies, the day the {{gmslaprov|Non Defaulting Party}} became aware of it);
*of any {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or any other {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} is determined under paragraphs {{gmslaprov|11.4}} to {{gmslaprov|11.6}} below, and:  
:'''{{gmslaprov|Deliverable Securities}}''' means {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} to be delivered by the {{gmslaprov|Defaulting Party}};
:(a) the '''{{gmslaprov|Appropriate Market}}''' is the most appropriate market for any securities determined by the {{gmslaprov|Non Defaulting Party}};  
:'''{{pgmslaprov|Net Value}}''' of any securities means the {{pgmslaprov|Non-Defaulting Party}}’s reasonable opinion of their fair {{pgmslaprov|Market Value}} less (where {{pgmslaprov|Lender}} is the {{pgmslaprov|Defaulting Party}}) or plus (where {{pgmslaprov|Borrower}} is the {{pgmslaprov|Defaulting Party}}), all reasonable costs of any transaction needed under paragraph {{pgmslaprov|11.4}} or {{pgmslaprov|11.5}} ('''{{pgmslaprov|Transaction Costs}}'''); and
:(b) the '''{{gmslaprov|Default Valuation Time}}''' means the [[close of business]] in the {{gmslaprov|Appropriate Market}} on the fifth dealing day after  
:'''{{gmslaprov|Receivable Securities}}''' means {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} to be delivered to the {{gmslaprov|Defaulting Party}}.<br>
::(i) the {{gmslaprov|Event of Default}} or,
::(ii) in the case of {{gmslaprov|Automatic Early Termination}}, the {{gmslaprov|Non Defaulting Party}} became aware of it;  
:(c) '''{{gmslaprov|Deliverable Securities}}''' means {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} to be delivered by the {{gmslaprov|Defaulting Party}};  
:(d) '''{{gmslaprov|Net Value}}''' means at any time, in relation to any {{gmslaprov|Deliverable Securities}} or {{gmslaprov|Receivable Securities}}, the amount which the {{gmslaprov|Non Defaulting Party}} reasonably considers to be their fair market value, plus or minus all reasonably anticipated {{gmslaprov|Transaction Costs}};  
:(e) '''{{gmslaprov|Receivable Securities}}''' means {{gmslaprov|Equivalent}} {{gmslaprov|Securities}} or {{gmslaprov|Equivalent}} {{gmslaprov|Non-Cash Collateral}} to be delivered to the {{gmslaprov|Defaulting Party}}; and
:(f) '''{{gmslaprov|Transaction Costs}}''' means the reasonable costs and expenses reasonably anticipated in buying Deliverable Securities or selling Receivable Securities, assuming that the aggregate is the least that could reasonably be expected to be paid in order to carry out the transaction. <br>

Latest revision as of 10:22, 24 June 2020

11.3 The Default Market Value of a Letter of Credit will be zero. For any Equivalent Securities or any other Equivalent Non-Cash Collateral it will be determined under paragraphs 11.4 to 11.6 below, where:

Appropriate Market is the most appropriate market for any securities determined by the Non-Defaulting Party;
Default Valuation Time means the Close of Business in the Appropriate Market on the fifth dealing day after the Event of Default (or where Automatic Early Termination applies, the day the Non Defaulting Party became aware of it);
Deliverable Securities means Equivalent Securities or Equivalent Non-Cash Collateral to be delivered by the Defaulting Party;
Net Value of any securities means the Non-Defaulting Party’s reasonable opinion of their fair Market Value less (where Lender is the Defaulting Party) or plus (where Borrower is the Defaulting Party), all reasonable costs of any transaction needed under paragraph 11.4 or 11.5 (Transaction Costs); and
Receivable Securities means Equivalent Securities or Equivalent Non-Cash Collateral to be delivered to the Defaulting Party.
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