1987 ISDA Interest Rate and Currency Exchange Agreement

Well and truly out of date version of the ISDA Master Agreement.

Replaced by the 1992 ISDA, and then the 2002 ISDA.

Differences between the 1987 form and the 1992 form

Reason for update

Principally, to:

• Expand range of products covered: Expand beyond interest rate derivatives and currency derivatives and promote the benefit of close-out netting
• Market Developments: Reflect legal developments between 1987 and 1992.

Significant Changes

• Physcial Delivery: Permits physical delivery
• Settlement Amounts: Introduices greater flexibility for determining Settlement Amounts upon termination of Transactions (the Loss, Market Quotation, First Method and Second Method regimes were introduced, subsequently refined by the 2002 ISDA into Close-out Amount).
• Two-Way Payments on Termination: Inder the 1987 ISDA a party may not receive termination payments (this is the "limited two-way payment" provision).
• Settlemnent netting: more flexibility for netting groups of transactions under Section 2 - under the 1987 ISDA you could either net just within single transactions or across all Transactions.

there are some others - a helpful guide can be found here