Template:Eta vs close-out amount: Difference between revisions
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===On the difference between an “Early Termination Amount” and a “Close-out Amount”=== | =====On the difference between an “Early Termination Amount” and a “Close-out Amount”===== | ||
A {{ | Regrettably, the {{1992ma}} features ''neither'' an {{{{{1}}}|Early Termination Amount}} ''nor'' a {{{{{1}}}|Close-out Amount}}. The {{2002ma}} has both, which looks like rather an indulgence until you realise that they do different things. | ||
A {{{{{1}}}|Close-out Amount}} is the termination value for a single {{{{{1}}}|Transaction}}, or a related group of {{{{{1}}}|Transaction}}s that a {{{{{1}}}|Non-Defaulting Party}} or {{{{{1}}}|Non-Affected Party}} calculates ''while'' closing out an {{2002ma}}, but it is ''not'' the final, overall sum due under the {{isdama}} itself. Each of the determined {{{{{1}}}|Transaction}} {{{{{1}}}|Close-out Amount}}s summed with the various {{{{{1}}}|Unpaid Amount}}s to arrive at the {{{{{1}}}|Early Termination Amount}}, which ''is'' the total net sum due under the {{isdama}} after the close-out process. (See Section {{{{{1}}}|6(e)(i)}} for more on that). | |||
Latest revision as of 19:07, 5 January 2024
On the difference between an “Early Termination Amount” and a “Close-out Amount”
Regrettably, the 1992 ISDA features neither an {{{{{1}}}|Early Termination Amount}} nor a {{{{{1}}}|Close-out Amount}}. The 2002 ISDA has both, which looks like rather an indulgence until you realise that they do different things.
A {{{{{1}}}|Close-out Amount}} is the termination value for a single {{{{{1}}}|Transaction}}, or a related group of {{{{{1}}}|Transaction}}s that a {{{{{1}}}|Non-Defaulting Party}} or {{{{{1}}}|Non-Affected Party}} calculates while closing out an 2002 ISDA, but it is not the final, overall sum due under the ISDA Master Agreement itself. Each of the determined {{{{{1}}}|Transaction}} {{{{{1}}}|Close-out Amount}}s summed with the various {{{{{1}}}|Unpaid Amount}}s to arrive at the {{{{{1}}}|Early Termination Amount}}, which is the total net sum due under the ISDA Master Agreement after the close-out process. (See Section {{{{{1}}}|6(e)(i)}} for more on that).