Template:Closing out the 2010 GMSLA

A contrarian’s guide to closing out a 2010 GMSLA

• There’s an Event of Default: Note that (unlike the ISDA Master Agreement an event only becomes an Event of Default once the Non-Defaulting Party has given notice of it with no need for the Non-Defaulting Party to give a further notice: it has already given one (or not had to, if it’s an event triggering Automatic Early Termination. Thus, at once:
• All payment and delivery obligations are accelerated, becoming due as of the date of the Event of Default, which is therefore the Termination Date, although this is not the date on which the close-out is settled - bear with me.
• Non-Defaulting Party determines the Default Market Value of Deliverable Securities as of the Termination Date. The Default Market Value is determined as of the Default Valuation Time, which is at close five dealing days after the Termination Date (or the date the NDP became aware of it, if an AET)