Margin Approach - IM CSD Provision

2018 ISDA Credit Support Deed (IM) (English law) A Jolly Contrarian owner’s manual™ Resources and navigation Resources: 2018 CSD Wikitext | 2018 CSD Nutshell Wikitext Navigation 1 (Interpretation) | 2 (Security) | 3 (Credit Support Obligations) | 4 (Conditions Precedent, Transfers, Timing, Calculations and Substitutions) | 5 (Dispute Resolution) | 6 (Custody Arrangements and the Control Agreement) | 7 (Default) | 8 (Certain Rights and Remedies) | 9 (Representation) | 10 (Expenses) | 11 (Other Provisions) | 12 (Definitions) | 13 (Elections and Variables) Index: Click ᐅ to expand: 2018 CSD Paragraph 3(c)(iii) in a Nutshell™ Use at your own risk, campers! 3(c)(iii) Margin Approach. Based on the “Margin Approach” specified in Paragraph 13 to govern the relationship between “Margin Amount (IM)” and “Margin Amount (IA)”, a Chargor’s “Credit Support Amount (IM)” on any Calculation Date (IM) will be: (A) If “Distinct Margin Flow (IM) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0], and the Chargor’s Margin Amount (IA) posting obligation under any Other CSA will not be affected in any way. (B) If “Allocated Margin Flow (IM/IA) Approach” applies: Max [Margin Amount (IM) - Threshold (IM), 0] and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced by that Credit Support Amount (IM) (subject to a minimum of zero). (C) If “Greater of Margin Flow (IM/IA) Approach” applies: Max [Max [Margin Amount (IM) -Threshold (IM), Margin Amount (IA)], 0], and its posting obligation for Margin Amount (IA) under any Other CSA will be reduced to zero. view template Full text of Paragraph 3(c)(iii) 3(c)(iii) Margin Approach. The parties have agreed, in Paragraph 13, to implement one of the following approaches (each a “Margin Approach”) with respect to the relationship between “Margin Amount (IM)” and “Margin Amount (IA)”. (A) If the “Distinct Margin Flow (IM) Approach” is specified as applicable in Paragraph 13, the following provisions will apply: (1) “Credit Support Amount (IM)” means, with respect to a party as the Chargor, for any Calculation Date (IM), (i) the Margin Amount (IM) applicable to the Chargor, if any, minus (ii) the Chargor’s Threshold (IM); provided, however, that the Credit Support Amount (IM) will be deemed to be zero whenever the calculation of the Credit Support Amount (IM) yields a number less than zero. (2) No Amendment to Obligations in respect of Margin Amount (IA). The posting obligation of a Chargor in respect of any amount that constitutes a Margin Amount (IA) under any Other CSA shall not be affected or amended in any way by the provisions of this Deed. (B) If the “Allocated Margin Flow (IM/IA) Approach” is specified as applicable in Paragraph 13, the following provisions will apply: (1) “Credit Support Amount (IM)” means, with respect to a party as the Chargor, for any Calculation Date (IM), (i) the Margin Amount (IM) applicable to the Chargor, if any, minus (ii) the Chargor’s Threshold (IM); provided, however, that the Credit Support Amount (IM) will be deemed to be zero whenever the calculation of the Credit Support Amount (IM) yields a number less than zero. (2) Amendment to Obligations in respect of Margin Amount (IA). The posting obligation of a Chargor in respect of any amount that constitutes a Margin Amount (IA) under any Other CSA shall be reduced on an aggregate basis by the amount of the Chargor’s Credit Support Amount (IM); provided, however, that if, after such reduction, any such Margin Amount (IA) would be a negative amount, such Margin Amount (IA) will be deemed to be zero. (C) If the “Greater of Margin Flow (IM/IA) Approach” is specified as applicable in Paragraph 13, the following provisions will apply: (1) “Credit Support Amount (IM)” means, with respect to a party as the Chargor, for any Calculation Date (IM), the greater of (i)(A) the Margin Amount (IM) applicable to the Chargor, if any, minus (B) the Chargor’s Threshold (IM) and (ii) the Margin Amount (IA); provided, however, that the Credit Support Amount (IM) will be deemed to be zero whenever the calculation of the Credit Support Amount (IM) yields a number less than zero. (2) Amendment to Obligations in respect of Margin Amount (IA). The posting obligation of a Chargor in respect of any amount that constitutes a Margin Amount (IA) under any Other CSA, other than such obligations of a Chargor under this Deed, shall be reduced to zero. view template Related agreements and comparisons Related Agreements Click here for the text of Section NA in the 2016 ISDA VM CSA Comparisons Nothing to compare with, Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

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Summary

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General discussion

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See also

• Independent Amount
• Reg Margin, one of the First Men

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