Template:Csa Conditions Precedent summ

Conditions precedent=

Another flawed asset clause?

Aren’t the Conditions precedent dealt with in Section 2(a)(iii) of the ISDA?

Well, they are — if your credit support annex counts as a Transaction under the ISDA, which the title transfer CSAs do (eg, the English law 1995 CSA and the 2016 VM CSA), but the security interest CSAs (the New York law 1994 NY CSA and 2016 NY VM CSA and the English law 2018 IM CSD) do not.

2018 IM CSD

In the 2018 IM CSD there is a curious reference to “provisions requiring the return of zero-Valued Posted Credit Support (IM)”. It is not entirely clear why ineligible Credit Support (that hence has a Value of zero), since it doesn’t count numerically into the Value of the Posted Credit Support (IM)) should be covered, as on its own theory of the game the Secured Party assigns no value to this collateral and has no justification for holding onto it — but on the other hand the argument is “well, you are going tetas arriba so frankly anything of yours that I hold I’m damn well keeping and selling for anything I can get for it.”

The latter argument, we fancy, will prevail.