Potential Failure to Pay - Credit Derivatives Provision

2014 ISDA Credit Derivatives Definitions
A Jolly Contrarian owner’s manual™

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Resources (full wikitext) \| (nutshell wikitext) \| Anatomy \| Narrowly-tailored credit event \| Equity v credit derivatives showdown Index: Click ᐅ to expand: Credit Derivatives

Section 1.48 in a Nutshell™

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Section 1.48. “Potential Failure to Pay” means the Reference Entity’s failure to make, when due, any payments in an aggregate amount of at least the Payment Requirement under any Obligations in accordance with their prevailing terms, without regard to any grace period which may apply. view template

Full text of Section 1.48

Section 1.48 Potential Failure to Pay. “Potential Failure to Pay” means the failure by the Reference Entity to make, when and where due, any payments in an aggregate amount of not less than the Payment Requirement under one or more Obligations in accordance with the terms of such Obligations at the time of such failure, without regard to any grace period or any conditions precedent to the commencement of any grace period applicable to such Obligations. view template

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You may be wondering why this provision is here, in Article 1, and not with Failure to Pay and the other Credit Events in Article 4. We are too.