Template:Repack and the single agreement: Difference between revisions
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===Repackaging vehicles and the Single Agreement=== | ===Repackaging vehicles and the Single Agreement=== | ||
Okay, do not adjust the [[Single Agreement]] provision ''unless'' you are writing an {{isdama}} for a [[repackaging vehicle]] issuing segregated, secured, [[limited recourse]] obligations. In that case you — and here I am supposing that “you” are the [[inhouse legal eagle]] at the arranging bank, or someone advising her — will have multiple Transactions ''nominally'' between the same two entities — your employer and the [[SPV]] — but economically being totally distinct, relating as they do to discrete ring-fenced “Series” issued by the [[SPV]] and you absolutely do ''not'' want these to form a [[single agreement]] with each other, or net, or do anything ostensibly desirable like that. | Okay, do not adjust the [[Single Agreement]] provision ''unless'' you are writing an {{isdama}} for a [[repackaging vehicle]] issuing segregated, secured, [[limited recourse]] obligations. In that case you — and here I am supposing that “you” are the [[inhouse legal eagle]] at the arranging bank, or someone advising her — will have multiple ISDA Transactions ''nominally'' between the same two entities — your employer and the [[SPV]] — but economically being totally distinct, relating as they do to discrete ring-fenced “Series” issued by the [[SPV]] and you absolutely do ''not'' want these to form a [[single agreement]] with each other, or net, or do anything ostensibly desirable like that. | ||
Each Transaction (or ''set'' of Transactions, if more than one Transaction}} attaches to a single Series) stands quite alone, should not be [[accelerated]], [[Cross default|cross-defaulted]], [[DUST - ISDA Provision|DUSTed]], closed out or heaven forbid [[Netting - ISDA Provision|netted]], just because some other Transaction, relating to another series, has gone [[Tetas arriba|''arriba'']]. Treat them as if each Series had its own distinct {{isdama}}, completely isolated, air-gapped and insulated against misadventure occurring in other {{isdama}}s the SPV has entered with you relating to other Series.<ref>Except as regards “Bankruptcy” of the [[SPV]], but if you have structured your vehicle correctly, it won’t be able to ''go'' bankrupt. And in any case the same bankruptcy event would be an independent Event of Default occurring under each discrete Master Agreement.</ref> | Each Transaction (or ''set'' of Transactions, if more than one Transaction}} attaches to a single Series) stands quite alone, should not be [[accelerated]], [[Cross default|cross-defaulted]], [[DUST - ISDA Provision|DUSTed]], closed out or heaven forbid [[Netting - ISDA Provision|netted]], just because some other Transaction, relating to another series, has gone [[Tetas arriba|''arriba'']]. | ||
Treat them as if each Series had its own distinct {{isdama}}, completely isolated, air-gapped and insulated against misadventure occurring in other {{isdama}}s the SPV has entered with you relating to other Series.<ref>Except as regards “Bankruptcy” of the [[SPV]], but if you have structured your vehicle correctly, it won’t be able to ''go'' bankrupt. And in any case the same bankruptcy event would be an independent Event of Default occurring under each discrete Master Agreement.</ref> | |||
In point of fact, your best bet is a bit of “[[deemery]]”: the Transactions entered into for each new Series should be under a deemed separate {{isdama}}, constituted specifically for the Series in question, on the standard terms set out in your repack programme. If you do this, then no amendment to the Single Agreement clause is necessary, since the way you have structured your ISDA, it is just a Single Agreement for the Series. Do not be surprised or alarmed if counterparts to the deal don’t buy this, or trust such deemery, and may wish to amend the Section 1(c) language as well. Try to resist this, but don’t [[die in a ditch]] about it. | |||
Revision as of 10:32, 26 May 2023
Repackaging vehicles and the Single Agreement
Okay, do not adjust the Single Agreement provision unless you are writing an ISDA Master Agreement for a repackaging vehicle issuing segregated, secured, limited recourse obligations. In that case you — and here I am supposing that “you” are the inhouse legal eagle at the arranging bank, or someone advising her — will have multiple ISDA Transactions nominally between the same two entities — your employer and the SPV — but economically being totally distinct, relating as they do to discrete ring-fenced “Series” issued by the SPV and you absolutely do not want these to form a single agreement with each other, or net, or do anything ostensibly desirable like that.
Each Transaction (or set of Transactions, if more than one Transaction}} attaches to a single Series) stands quite alone, should not be accelerated, cross-defaulted, DUSTed, closed out or heaven forbid netted, just because some other Transaction, relating to another series, has gone arriba.
Treat them as if each Series had its own distinct ISDA Master Agreement, completely isolated, air-gapped and insulated against misadventure occurring in other ISDA Master Agreements the SPV has entered with you relating to other Series.[1]
In point of fact, your best bet is a bit of “deemery”: the Transactions entered into for each new Series should be under a deemed separate ISDA Master Agreement, constituted specifically for the Series in question, on the standard terms set out in your repack programme. If you do this, then no amendment to the Single Agreement clause is necessary, since the way you have structured your ISDA, it is just a Single Agreement for the Series. Do not be surprised or alarmed if counterparts to the deal don’t buy this, or trust such deemery, and may wish to amend the Section 1(c) language as well. Try to resist this, but don’t die in a ditch about it.