Default interest - GMRA Provision
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2010 Global Master Securities Lending Agreement
Clause 10(f) in a Nutshell™ Use at your own risk, campers!
Full text of Clause 10(f) Related agreements and comparisons
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Content and comparisons
Summary
General discussion
See also
References
Compare with Clause 4(f), which is the standard interest payable on the cash leg of a Transaction.
This is default interest, where things have gone Pete Tong for one party and the other has referred matters to its learned friends. In theory, this provision references the dreaded LIBOR — cue obligatory reference to the dramatic look gopher — and is thus in scope for LIBOR remediation, but in practice the question is this:
- Is the world going to go any further towards hell in a hand-basket if there is confusion about the interest rate which you charge on the accrual of your legal fees?
Respectfully — given that, on the theory of the game your Counterparty is already smoking ruin; thus, you are already in hell, in a hand-basket — the JC respectfully submits it will not.
GMSLA equivalent
The corresponding 2010 GMSLA provision (clause 11.7) is similar in effect, and in its potential LIBOR impact.
DLG
And now: A quick dramatic look gopher.
See also
- Clause 4(f) — Interest on Cash Margin
- Clause 11.7, being the equivalent provision in the 2010 GMSLA
- LIBOR