Default interest - GMRA Provision: Difference between revisions

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{{gmraanat|10(f)}}Compare with Clause {{gmraprov|4(f)}}, which is the standard interest payable on the cash leg of a {{gmraprov|Transaction}}. This is default interest, where things have gone pete tong and one side has referred matters to its learned friends. In theory in scope for [[LIBOR]] remediation — cue obligatory reference to the dramatic look gopher — but is the world going to go any further towards Hell in a hand-basket if there is confusion about the interest basis on which you can recover legal fees? Respectfully — given that, on the theory of the game your Counterparty is a smoking ruin and so you are ''already'' in hell, in a hand-basket, the [[JC]] respectfuilly submits it will not.
{{gmraanat|10(f)}}Compare with Clause {{gmraprov|4(f)}}, which is the standard interest payable on the cash leg of a {{gmraprov|Transaction}}. This is default interest, where things have gone pete tong and one side has referred matters to its learned friends. In theory in scope for [[LIBOR]] remediation — cue obligatory reference to the [[dramatic look gopher]] — but is the world going to go any further towards Hell in a hand-basket if there is confusion about the interest basis on which you can recover legal fees? Respectfully — given that, on the theory of the game your Counterparty is a smoking ruin and so you are ''already'' in hell, in a hand-basket, the [[JC]] respectfuilly submits it will not.


And now: A quick [[dramatic look gopher]].
And now: A quick [[dramatic look gopher]].
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{{sa}}
{{sa}}
*Clause {{gmraprov|4(f)}} — {{gmraprov|Interest on Cash Margin}}
*Clause {{gmraprov|4(f)}} — {{gmraprov|Interest on Cash Margin}}
*[[LIBOR]]

Revision as of 11:52, 13 November 2019

GMRA Anatomy™


In a Nutshell™ Clause 10(f):

10(f) The Defaulting Party must pay the non-Defaulting Party its reasonable professional expenses incurred in connection with an Event of Default plus interest calculated at LIBOR or, if the expense relates to a particular Transaction, the higher of LIBOR and the Pricing Rate for that Transaction.
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Global Master Repurchase Agreement full text of Clause 10(f):

10(f) The Defaulting Party shall be liable to the non-Defaulting Party for the amount of all reasonable legal and other professional expenses incurred by the non-Defaulting Party in connection with or as a consequence of an Event of Default, together with interest thereon at LIBOR or, in the case of an expense attributable to a particular Transaction, the Pricing Rate for the relevant Transaction if that Pricing Rate is greater than LIBOR.
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Resources: 2010 GMRA: Full wikitext · Nutshell wikitext
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Compare with Clause 4(f), which is the standard interest payable on the cash leg of a Transaction. This is default interest, where things have gone pete tong and one side has referred matters to its learned friends. In theory in scope for LIBOR remediation — cue obligatory reference to the dramatic look gopher — but is the world going to go any further towards Hell in a hand-basket if there is confusion about the interest basis on which you can recover legal fees? Respectfully — given that, on the theory of the game your Counterparty is a smoking ruin and so you are already in hell, in a hand-basket, the JC respectfuilly submits it will not.

And now: A quick dramatic look gopher.

See also

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