Template:M summ 2002 ISDA 6(b): Difference between revisions
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[[6(b) - ISDA Provision|There]] is a difference between {{isdaprov|Termination Event}}s that are ''non''-catastrophic, and usually ''{{isdaprov|Transaction}}''-specific, and those that ''are'' catastrophic, which are usually ''counterparty'' specific. | [[6(b) - ISDA Provision|There]] is a difference between {{isdaprov|Termination Event}}s that are ''non''-catastrophic, and usually ''{{isdaprov|Transaction}}''-specific, and those that ''are'' catastrophic, which are usually ''counterparty'' specific. | ||
Non-catastrophic ones affecting just a subset of {{isdaprov|Transaction}}s might be caused by, say, a {{isdaprov|Tax Event}} or a local {{isdaprov|Illegality}}, but in any weather do not concern the [[solvency]], [[creditworthiness]] or basic mendacity of your counterparty. They generally won’t have much, directly, to do with your counterparty at all beyond the jurisdictions it inhabits and the laws it is subject to. These are generally the {{isdaprov|Termination Event}}s, but not {{ | Non-catastrophic ones affecting just a subset of {{isdaprov|Transaction}}s might be caused by, say, a {{isdaprov|Tax Event}} or a local {{isdaprov|Illegality}}, but in any weather do not concern the [[solvency]], [[creditworthiness]] or basic mendacity of your counterparty. They generally won’t have much, directly, to do with your counterparty at all beyond the jurisdictions it inhabits and the laws it is subject to. These are generally the {{isdaprov|Termination Event}}s, but not {{isdaprov|Additional Termination Event}}s. | ||
The catastrophic ones are by their nature affect — that is, “[[Affected Transaction - 1992 ISDA Provision|Affect]]” — '''''all''' {{isdaprov|Transactions}}''. These generally are the bespoke {{isdaprov|Additional Termination Event}}s your [[credit department]] insisted on — or ''theirs'' did; they ''will'' have something to do with the naughtiness of lack of fibre of your counterparty (or you!), and these function for most respects a lot more like {{isdaprov|Events of Default}}. | The catastrophic ones are by their nature affect — that is, “[[Affected Transaction - 1992 ISDA Provision|Affect]]” — '''''all''' {{isdaprov|Transactions}}''. These generally are the bespoke {{isdaprov|Additional Termination Event}}s your [[credit department]] insisted on — or ''theirs'' did; they ''will'' have something to do with the naughtiness of lack of fibre of your counterparty (or you!), and these function for most respects a lot more like {{isdaprov|Events of Default}}. | ||
Thus, in the drafting of ISDA Schedules, CSAs and so on, you will often find laboured reference to {{isdaprov|Events of Default}} [[and/or]] {{isdaprov|Termination Events}} which lead to {{isdaprov|Early Termination Date}}s ''with respect to all outstanding {{isdaprov|Transaction}}s'' as some kind of special, hyper-exciting, class of {{isdaprov|Termination Event}}. | Thus, in the drafting of ISDA Schedules, CSAs and so on, you will often find laboured reference to {{isdaprov|Events of Default}} [[and/or]] {{isdaprov|Termination Events}} which lead to {{isdaprov|Early Termination Date}}s ''with respect to all outstanding {{isdaprov|Transaction}}s'' as some kind of special, hyper-exciting, class of {{isdaprov|Termination Event}}. | ||
Revision as of 08:54, 25 December 2023
There is a difference between Termination Events that are non-catastrophic, and usually Transaction-specific, and those that are catastrophic, which are usually counterparty specific.
Non-catastrophic ones affecting just a subset of Transactions might be caused by, say, a Tax Event or a local Illegality, but in any weather do not concern the solvency, creditworthiness or basic mendacity of your counterparty. They generally won’t have much, directly, to do with your counterparty at all beyond the jurisdictions it inhabits and the laws it is subject to. These are generally the Termination Events, but not Additional Termination Events.
The catastrophic ones are by their nature affect — that is, “Affect” — all Transactions. These generally are the bespoke Additional Termination Events your credit department insisted on — or theirs did; they will have something to do with the naughtiness of lack of fibre of your counterparty (or you!), and these function for most respects a lot more like Events of Default.
Thus, in the drafting of ISDA Schedules, CSAs and so on, you will often find laboured reference to Events of Default and/or Termination Events which lead to Early Termination Dates with respect to all outstanding Transactions as some kind of special, hyper-exciting, class of Termination Event.