Hedging Disruption - Equity Derivatives Provision
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Commentary
Pernickety amendments
Expect to see some amendments to this clause, chiefly to appease fastidious counsel. For example:
- You may see some tinkering with “transaction(s) or asset(s) it deems necessary to hedge the equity price risk of entering into and performing its obligations with respect to the relevant Transaction” — perhaps to refer to “Hedge Positions” instead of “transaction(s) or asset(s)”[1], and to broaden equity price risk to “market risk (including but not limited to equity price risk, foreign exchange risk and interest rate risk)”
- The Hedging Party may only be allowed to terminate any transaction pro rata with the actual Hedging Disruption
See also
Consequences of Hedging Disruption
Consequences of an Additional Disruption Event in particular 12.9(b)(iii) and, where Loss of Stock Borrow intersects with Hedging Disruption, 12.9(b)(vii):
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