83,240
edits
Template:Csa Security summ: Difference between revisions
no edit summary
Amwelladmin (talk | contribs) (Created page with "What is the point of the “covenant to perform”? Unless there is a third-party security trustee involved — common in asset-backed securities, for example — who is not a direct benefit of the covenant to perform, we are not entirely clear. After all, the whole contract is a mutual covenant to perform. That is what a contract is.") |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 1: | Line 1: | ||
What is the point of the “covenant to perform”? Unless there is a third-party security trustee involved — [[Covenant to pay - Repackaging Provision|common in asset-backed securities]], for example — who is not a direct benefit of the covenant to perform | ====Paragraph 2(a) Covenant to Perform==== | ||
What is the point of the “covenant to perform”? Unless there is a third-party security trustee involved — [[Covenant to pay - Repackaging Provision|common in asset-backed securities]], for example — who is not a direct benefit of the covenant to perform then you already have a covenant in the ISDA itself. After all, the whole contract is a mutual covenant to perform. The reasons are partly habitual, belts-and-braces sort of stuff, partly practical and partly the [[deep magic]] from which the idea of security sprang in the primordial beginnings of the [[common law]]. The practical one is that the {{csd}} is, of course, a contract executed as a deed — a “[[specialty]]” in the odd language of Section 8 of the [[Limitation Act 1980]] — thereby earning you a 12-year limitation period, quite an upgrade on the 6-year period you get under the ''non''-specialty {{isdama}}, being indebtedness incurred under a “[[simple contract]]”. | |||
Now what exactly would you be doing to omit to file a claim under a failed credit support arrangement for 6 months, let alone six years, it is hard to say, so this may seem like a peripheral benefit for all but the truly disorganised — but seeing as you’re signing as a specialty, and the benefit is there for the taking, Casanova’s prerogative applies. Stick it in. No-one will argue about it. | |||