Guarantee checklist: Difference between revisions
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A checklist, should you need one for an [[Guarantee|affiliate guarantee]]. | A checklist, should you need one for an [[Guarantee|affiliate guarantee]], offered up as a credit support document for an {{isdama}} or other master trading arrangement. | ||
{| class="wikitable sortable" | ====ISDA alert: look out for Transaction-specific guarantees==== | ||
As well as the guarantee checklist below - which is specific to the guarantee as a guarantee, there is an ISDA-specific trick to look out for. Beware of [[transaction-specific guarantee]]s. | |||
Thanks to the curious architecture of the ISDA, transaction-specific guarantees, even if formally valid and enforceable per the below, won’t work because at the time when you invoke them, the Transaction has been terminated and its exposure aggregated under the master agreement proper. The reasons for this are complicated, so rather than rehearse them here, there is a separate article for them, [[transaction-specific guarantee|here]]. | |||
{{sa}} | |||
*[[Guarantee]] | |||
*[[Transaction-specific guarantee]] | |||
{| class="wikitable sortable" style="font-size: 80%; font-family: Helvetica;" | |||
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! Issue !! Narrative !! | ! Issue !! Narrative !! Check | ||
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| '''Consideration'''|| Is there consideration?|| | | '''Consideration'''|| Is there [[consideration]]?|| | ||
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| '''Permanence''' || Is it unconditional, irrevocable and continuing? || | | '''Permanence''' || Is it unconditional, irrevocable and continuing? || | ||
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|rowspan=" | |rowspan="6"| '''Unaffected'''|| Is it unaffected by: | ||
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Interim payments | |||
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Obligor’s [[insolvency]] | |||
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Amendment or discharge of obligor’s obligations | |||
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Beneficiary’s waiver or forbearance to the obligor | |||
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Other customary grounds for discharge of guarantees | |||
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| '''Tax gross-up'''|| Must guarantor gross up if subject to withholding on guarantee payments?|| | | '''Tax gross-up'''|| Must guarantor gross up if subject to withholding on guarantee payments?|| | ||
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