Template:Isda 6(b)(iv) summ: Difference between revisions

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# '''{{{{{1}}}|Non-Affected Party}} ones''': If it’s a {{{{{1}}}|CEUM}}<ref>That’s “Credit Event Upon Merger” to the cool kids.</ref>, an {{{{{1}}}|ATE}} or a {{{{{1}}}|TEUM}} ''where the {{{{{1}}}|Non-Affected Party}} suffers the tax'', then if the other guy is a {{{{{1}}}|Non-Affected Party}}, then (whether or not you are) you may designate an {{{{{1}}}|Early Termination date}} for the {{{{{1}}}|Affected Transactions}}.
# '''{{{{{1}}}|Non-Affected Party}} ones''': If it’s a {{{{{1}}}|CEUM}}<ref>That’s “Credit Event Upon Merger” to the cool kids.</ref>, an {{{{{1}}}|ATE}} or a {{{{{1}}}|TEUM}} ''where the {{{{{1}}}|Non-Affected Party}} suffers the tax'', then if the other guy is a {{{{{1}}}|Non-Affected Party}}, then (whether or not you are) you may designate an {{{{{1}}}|Early Termination date}} for the {{{{{1}}}|Affected Transactions}}.
# '''{{{{{1}}}|Illegality}} and {{isdaprov|Force Majeure}}''': Here, if you are on a {{2002ma}}, there may be a {{isdaprov|Waiting Period}} to sit through, to see whether the difficulty clears. For {{isdaprov|Force Majeure Event}} it is eight {{isdaprov|Local Business Day}}s; for {{isdaprov|Illegality}} ''other than one preventing performance of a {{isdaprov|Credit Support Document}}'': three {{isdaprov|Local Business Day}}s. So, sit through it. Why is there exception for {{isdaprov|Illegality}} on a {{isdaprov|Credit Support Document}}? Because, even though it wasn’t your fault, illegality of a {{isdaprov|Credit Support Document}} profoundly changes your credit assessment (in a way that arguably, even a payment or delivery obligation doesn’t), and that is the most fundamental risk you are managing under the {{isdama}}.
# '''{{{{{1}}}|Illegality}} and {{isdaprov|Force Majeure}}''': Here, if you are on a {{2002ma}}, there may be a {{isdaprov|Waiting Period}} to sit through, to see whether the difficulty clears. For {{isdaprov|Force Majeure Event}} it is eight {{isdaprov|Local Business Day}}s; for {{isdaprov|Illegality}} ''other than one preventing performance of a {{isdaprov|Credit Support Document}}'': three {{isdaprov|Local Business Day}}s. So, sit through it. Why is there exception for {{isdaprov|Illegality}} on a {{isdaprov|Credit Support Document}}? Because, even though it wasn’t your fault, illegality of a {{isdaprov|Credit Support Document}} profoundly changes your credit assessment (in a way that arguably, even a payment or delivery obligation doesn’t), and that is the most fundamental risk you are managing under the {{isdama}}.
===[[Repackaging programme|Repackaging SPV]]s===
I know, I know, I know — to a thoroughbred [[ISDA ninja]], [[repackaging]] SPVs are like non-canonical heretical fan fiction and we shouldn’t really even talk about them, but still: you may see statements like this:
{{quote|If an {{{{{1}}}|Additional Termination Event}} occurs, an {{{{{1}}}|Early Termination Date}} for the {{isdaprov|Transaction}} will occur immediately. The references to “{{{{{1}}}|Additional Termination Event}}” in Section {{{{{1}}}|6(b)(iv)}} will be deleted.}}
This is just a tacit recognition that the swap in a [[repackaging]] structure is part of a greater whole, and there are people depending on it (viz., noteholders) and who care about it more than the actual counterparty to the swap (which is, after all, a mindless [[espievie]]), but who, by dint of their shadowy and anonymous existence as bearer noteholders, are in no position to ensure things happen promptly. So rather than leaving it for all this nonsense with designating notices, it just kicks off automatically, allowing the various slaves, drones and pleasurebots that attend to an espievie’s every need, to go about unwinding the note.
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