Delivery Amount (VM) - NY VM CSA Provision

2016 ISDA Credit Support Annex (VM) (New York law) A Jolly Contrarian owner’s manual™ Resources and navigation Resources Wikitext | Nutshell wikitext Navigation 1 (Interpretation) | 2 (Security Interest) | 3 (Credit Support Obligations) | 4 ( Conditions Precedent, Transfer Timing, Calculations and Substitutions) | 5 (Dispute Resolution) | 6 (Holding and Using Posted Collateral (VM)) | 7 (Events of Default) | 8 (Certain Rights and Remedies) | 9 (Representations) | 10 (Expenses) | 11 (Miscellaneous) | 12 (Definitions) | 13 (Elections and Variables) Index: Click ᐅ to expand: 2016 NY VM CSA Paragraph 3(a) in a Nutshell™ Use at your own risk, campers! Template:Nutshell 2016 NY CSA 3(a) view template Full text of Paragraph 3(a) 3(a) Delivery Amount (VM). Subject to Paragraphs 4 and 5, upon a demand made by the Secured Party on or promptly following a Valuation Date, if the Delivery Amount (VM) for that Valuation Date equals or exceeds the Pledgor’s Minimum Transfer Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit Support (VM) having a Value as of the date of Transfer at least equal to the applicable Delivery Amount (VM) (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the “Delivery Amount (VM)” applicable to the Pledgor for any Valuation Date will equal the amount by which: (i) the Secured Party’s Exposure exceeds (ii) the Value as of that Valuation Date of all Posted Credit Support (VM) held by the Secured Party. view template Related agreements and comparisons Related Agreements Click here for the text of Section 3(a) in the 1994 New York law CSA Click here for the text of Section 2(a) in the 1995 English Law CSA Click here for the text of Section 2(a) in the 2016 English Law VM CSA Comparisons 1994 NY CSA and 2016 NY Law VM CSA: click for comparison 2016 VM CSA and 2016 NY Law VM CSA: click for comparison 1995 CSA and 2016 VM CSA: click for comparison Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Content and comparisons

Now the interesting thing here is the difference that pledged collateral under the New York law versions of the CSA makes over title-transferred collateral regime of the English law versions. You will see the difference in the NY law version’s Delivery Amount, which is the positive difference between Secured Party’s Exposure and the value of Posted Credit Support held by the Secured Party — easy, right? — and the equivalent provision in the English law versions which is the positive difference between the Transferee’s Exposure and the Credit Support adjusted to exclude any inflight but unsettled collateral movements.

The English law versions are a bit more leaden in how they describe things but these amount to the same thing: you don’t get any credit (support) for collateral until it has landed with the other party.

This creates some curious scenarios, as you will see.

Template

See also

Template