Template:M summ 2002 ISDA 5(b)(v)

Pay attention to the interplay between this section and Section 7(a) (Transfer). You should not need to amend Section 7(a) (for example to require equivalence of credit quality of any transferee entity etc., because that is managed by CEUM.

Note also the interrelationship between CEUM and a Ratings Downgrade ATE, should there be one. One can be forgiven for feeling a little ambivalent about CEUM because it is either caught by Ratings Downgrade or, if there is no requirement for a general Ratings Downgrade, insisting on CEUM seems a bit arbitrary (i.e. why do you care about a downgrade as a result of a merger, but not any other ratings downgrade?)

Hedge funds and CEUM: Really, we are a hedge fund, we’re not rated, we’re not going to be and we’re hardly going to merge, are we? and even if we did we wouldn’t do it in a way that disadvantaged existing investors. So must we really have a CEUM? We really must, lest the sky fall in on our heads. For it is written: it is the credit officer’s refrain. Look at it from the other end of the barrel: since you are definitely not going to merge, why bother dying in a ditch about a clause that might penalise you if you did? I know, I know — it is stupid, but there is a hell of a lot of stupid out there. Pick your battles.