Template:Isda 6(e) summ: Difference between revisions
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''For our step-by-step guide to closing out an {{isdama}} see Section {{isdaprov|6(a)}}.'' | ''For our step-by-step guide to closing out an {{isdama}} see Section {{isdaprov|6(a)}}.'' | ||
{{Eta vs close-out amount}} | {{Eta vs close-out amount|{{{1}}}}} | ||
Latest revision as of 10:40, 6 September 2024
For our step-by-step guide to closing out an ISDA Master Agreement see Section 6(a).
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).