Template:Isda 5(a)(vi) comp: Difference between revisions
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Amwelladmin (talk | contribs) Created page with "The {{2002ma}} updates the {{1992ma}}’s {{isda92prov|Cross Default}} so that if the combined amount outstanding under the two limbs of {{{{{1}}}|Cross Default}} exceed the {{{{{1}}}|Threshold Amount}}, then it will be an {{{{{1}}}|Event of Default}}. Normally, under the {{1992ma}}, {{{{{1}}}|Cross Default}} requires one ''or'' the other limbs to be satisfied — you can’t add them together. This was a bit of a snafu. The two limbs are: #a default under a financial..." |
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{{drop|T|he {{2002ma}}}} updates the {{1992ma}}’s {{isda92prov|Cross Default}} so that if the combined amount outstanding under the two limbs of {{{{{1}}}|Cross Default}} exceed the {{{{{1}}}|Threshold Amount}}, then it will be an {{{{{1}}}|Event of Default}}. Normally, under the {{1992ma}}, {{{{{1}}}|Cross Default}} requires one ''or'' the other limbs to be satisfied — you can’t add them together. This was a bit of a snafu. | |||
The two limbs are: | The two limbs are: | ||
#a default under a financial agreement that would allow a creditor to [[accelerate]] any [[indebtedness]] that party owes it; | #a default under a financial agreement that would allow a creditor to [[accelerate]] any [[indebtedness]] that party owes it; | ||
#a [[failure to pay]] on the due date under such agreements after the expiry of a [[grace period]]. | #a [[failure to pay]] on the due date under such agreements after the expiry of a [[grace period]]. | ||
=====Comparison with securities financing===== | |||
Neither the {{gmsla}} nor the {{gmra}} have, as standard, either a [[cross default]] or a [[default under specified transaction]] provision. ''[[Cross Default - GMSLA Provision|Unless some bright spark thinks it is a good idea to negotiate one in]].'' | |||
Revision as of 12:34, 26 October 2024
The 2002 ISDA updates the 1992 ISDA’s Cross Default so that if the combined amount outstanding under the two limbs of {{{{{1}}}|Cross Default}} exceed the {{{{{1}}}|Threshold Amount}}, then it will be an {{{{{1}}}|Event of Default}}. Normally, under the 1992 ISDA, {{{{{1}}}|Cross Default}} requires one or the other limbs to be satisfied — you can’t add them together. This was a bit of a snafu.
The two limbs are:
- a default under a financial agreement that would allow a creditor to accelerate any indebtedness that party owes it;
- a failure to pay on the due date under such agreements after the expiry of a grace period.
Comparison with securities financing
Neither the 2010 GMSLA nor the Global Master Repurchase Agreement have, as standard, either a cross default or a default under specified transaction provision. Unless some bright spark thinks it is a good idea to negotiate one in.