Template:Isda 6(b)(ii) summ: Difference between revisions
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Once the {{{{{1}}}|Waiting Period}} expires, it will be a {{{{{1}}}|Termination Event}} entitling either party to terminate some or all {{{{{1}}}|Affected Transactions}}. Partial termination is permitted because the impact on an event on each {{{{{1}}}|Transaction}} may differ from case to case (eg transactions forming part of a [[structured finance]] deal like a [[Repackaging|repack]] or a [[CDO]]) might not be easily replaced, so the disadvantages of terminating may | Once the {{{{{1}}}|Waiting Period}} expires, it will be a {{{{{1}}}|Termination Event}} entitling either party to terminate some or all {{{{{1}}}|Affected Transactions}}. Partial termination is permitted because the impact on an event on each {{{{{1}}}|Transaction}} may differ from case to case (eg transactions forming part of a [[structured finance]] deal like a [[Repackaging|repack]] or a [[CDO]]) might not be easily replaced, so the disadvantages of terminating may outweigh the advantages. | ||
Note though that if an {{{{{1}}}|Non-Affected Party}} does elect partial termination, the {{{{{1}}}|Affected Party}} has the right to terminate some or all of the remaining {{{{{1}}}|Transactions}}: this prevents {{{{{1}}}|Non-Affected Parties}} being opportunistic. Heaven forfend. | As far as ''[[Branch|branches]]'' are concerned this is relatively uncontroversial, especially if yours is a multi-branch {{isdama}}. But there is an interesting philosophical question here, for, without an express pre-existing contractual right to do so, a party may not ''unilaterally'' transfer its obligations under a contract to someone else. That, being a [[novation]], requires the other party’s consent. This is deep contractual lore, predating the [[First Men]] and even the [[Children of the Forest]]. So if the {{{{{1}}}|Affected Party}} identifies an affiliate to whom it can transfer its rights and obligations, the {{{{{1}}}|Non-affected Party}} still may withhold consent. | ||
Note though that if an {{{{{1}}}|Non-Affected Party}} ''does'' elect partial termination, the {{{{{1}}}|Affected Party}} has the right to terminate some or all of the remaining {{{{{1}}}|Transactions}}: this prevents {{{{{1}}}|Non-Affected Parties}} being opportunistic. Heaven forfend. | |||
Revision as of 13:09, 12 April 2020
Once the {{{{{1}}}|Waiting Period}} expires, it will be a {{{{{1}}}|Termination Event}} entitling either party to terminate some or all {{{{{1}}}|Affected Transactions}}. Partial termination is permitted because the impact on an event on each {{{{{1}}}|Transaction}} may differ from case to case (eg transactions forming part of a structured finance deal like a repack or a CDO) might not be easily replaced, so the disadvantages of terminating may outweigh the advantages.
As far as branches are concerned this is relatively uncontroversial, especially if yours is a multi-branch ISDA Master Agreement. But there is an interesting philosophical question here, for, without an express pre-existing contractual right to do so, a party may not unilaterally transfer its obligations under a contract to someone else. That, being a novation, requires the other party’s consent. This is deep contractual lore, predating the First Men and even the Children of the Forest. So if the {{{{{1}}}|Affected Party}} identifies an affiliate to whom it can transfer its rights and obligations, the {{{{{1}}}|Non-affected Party}} still may withhold consent.
Note though that if an {{{{{1}}}|Non-Affected Party}} does elect partial termination, the {{{{{1}}}|Affected Party}} has the right to terminate some or all of the remaining {{{{{1}}}|Transactions}}: this prevents {{{{{1}}}|Non-Affected Parties}} being opportunistic. Heaven forfend.