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| ==Commentary==
| | {{newisdamanual|Close-out Amount}} |
| Close-out amount as a concept was introduced in the {{2002ma}} and doesn't exist under the {{1992ma}}. Instead, terminated transactions are determined according to {{isdaprov|Market Quotation}} or {{isdaprov|Loss}}. There are some local variations which are worth bearing in mind:
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| ===Close-out amount and Italian counterparties===
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| *See for more detail, here: [[Close-out Amount - ISDA Provision/Italian counterparties|Italian counterparties]]
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| ==Text==
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| ===[[1992 ISDA Master]] Agreement===
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| Close-out amount concept doesn't exist under the [[1992 ISDA Master]]. Instead, terminated transactions are determined according to {{isdaprov|Market Quotation}} or {{isdaprov|Loss}}. {{isdacomparison}}
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| ===[[2002 ISDA Master]] Agreement===
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| also from the [[you'll be sorry you asked]] file.
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| {{isdaquote|“{{isdaprov|Close-out Amount}}” means, with respect to each {{isdaprov|Terminated Transaction}} or each group of {{isdaprov|Terminated Transactions}}<br>
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| and a {{isdaprov|Determining Party}}, the amount of the losses or costs of the {{isdaprov|Determining Party}} that are or would be incurred<br>
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| under then prevailing circumstances (expressed as a positive number) or gains of the {{isdaprov|Determining Party}} that are or<br>
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| would be realised under then prevailing circumstances (expressed as a negative number) in replacing, or in providing<br>
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| for the {{isdaprov|Determining Party}} the economic equivalent of, (a) the material terms of that {{isdaprov|Terminated Transaction}} or group<br>
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| of {{isdaprov|Terminated Transactions}}, including the payments and deliveries by the parties under Section {{isdaprov|2(a)(i)}} in respect of<br>
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| that {{isdaprov|Terminated Transaction}} or group of {{isdaprov|Terminated Transactions}} that would, but for the occurrence of the relevant<br>
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| {{isdaprov|Early Termination Date}}, have been required after that date (assuming satisfaction of the conditions precedent in<br>
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| Section {{isdaprov|2(a)(iii)}}) and (b) the option rights of the parties in respect of that {{isdaprov|Terminated Transaction}} or group of<br>
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| {{isdaprov|Terminated Transactions}}.<br>
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| <br>
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| Any {{isdaprov|Close-out Amount}} will be determined by the {{isdaprov|Determining Party}} (or its agent), which will act in good faith and<br>
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| use commercially reasonable procedures in order to produce a commercially reasonable result. The Determining<br>
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| Party may determine a {{isdaprov|Close-out Amount}} for any group of {{isdaprov|Terminated Transactions}} or any individual Terminated<br>
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| Transaction but, in the aggregate, for not less than all {{isdaprov|Terminated Transactions}}. Each {{isdaprov|Close-out Amount}} will be<br>
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| determined as of the {{isdaprov|Early Termination Date}} or, if that would not be commercially reasonable, as of the date or dates<br>
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| following the {{isdaprov|Early Termination Date}} as would be commercially reasonable.<br>
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| <br>
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| {{isdaprov|Unpaid Amounts}} in respect of a {{isdaprov|Terminated Transaction}} or group of {{isdaprov|Terminated Transactions}} and legal fees and out-<br>
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| of-pocket expenses referred to in Section 11 are to be excluded in all determinations of {{isdaprov|Close-out Amounts}}.<br>
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| <br>
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| In determining a {{isdaprov|Close-out Amount}}, the {{isdaprov|Determining Party}} may consider any relevant information, including, without<br>
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| limitation, one or more of the following types of information:―<br>
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| <br>
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| (i) quotations (either firm or indicative) for replacement transactions supplied by one or more third parties that<br>
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| may take into account the creditworthiness of the {{isdaprov|Determining Party}} at the time the quotation is provided and the<br>
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| terms of any relevant documentation, including credit support documentation, between the {{isdaprov|Determining Party}} and the<br>
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| third party providing the quotation;<br>
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| <br>
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| (ii) information consisting of relevant market data in the relevant market supplied by one or more third parties<br>
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| including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other<br>
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| relevant market data in the relevant market; or<br>
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| <br>
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| (iii) information of the types described in clause (i) or (ii) above from internal sources (including any of the<br>
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| {{isdaprov|Determining Party}}’s {{isdaprov|Affiliates}}) if that information is of the same type used by the {{isdaprov|Determining Party}} in the regular<br>
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| course of its business for the valuation of similar transactions.<br>
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| <br>
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| The {{isdaprov|Determining Party}} will consider, taking into account the standards and procedures described in this definition,<br>
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| quotations pursuant to clause (i) above or relevant market data pursuant to clause (ii) above unless the Determining<br>
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| Party reasonably believes in good faith that such quotations or relevant market data are not readily available or would<br>
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| produce a result that would not satisfy those standards. When considering information described in clause (i), (ii) or<br>
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| (iii) above, the {{isdaprov|Determining Party}} may include costs of funding, to the extent costs of funding are not and would not<br>
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| be a component of the other information being utilised. Third parties supplying quotations pursuant to clause (i)<br>
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| above or market data pursuant to clause (ii) above may include, without limitation, dealers in the relevant markets,<br>
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| end-users of the relevant product, information vendors, brokers and other sources of market information.<br>
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| <br>
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| Without duplication of amounts calculated based on information described in clause (i), (ii) or (iii) above, or other<br>
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| relevant information, and when it is commercially reasonable to do so, the {{isdaprov|Determining Party}} may in addition<br>
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| consider in calculating a {{isdaprov|Close-out Amount}} any loss or cost incurred in connection with its terminating, liquidating or<br>
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| re-establishing any hedge related to a {{isdaprov|Terminated Transaction}} or group of {{isdaprov|Terminated Transactions}} (or any gain<br>
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| resulting from any of them).<br>
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| <br>
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| Commercially reasonable procedures used in determining a {{isdaprov|Close-out Amount}} may include the following:―<br>
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| <br>
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| (1) application to relevant market data from third parties pursuant to clause (ii) above or information from<br>
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| internal sources pursuant to clause (iii) above of pricing or other valuation models that are, at the time of the<br>
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| determination of the {{isdaprov|Close-out Amount}}, used by the {{isdaprov|Determining Party}} in the regular course of its business in pricing<br>
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| or valuing transactions between the {{isdaprov|Determining Party}} and unrelated third parties that are similar to the Terminated<br>
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| Transaction or group of {{isdaprov|Terminated Transactions}}; and<br>
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| <br>
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| (2) application of different valuation methods to {{isdaprov|Terminated Transactions}} or groups of {{isdaprov|Terminated Transactions}}<br>
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| depending on the type, complexity, size or number of the {{isdaprov|Terminated Transactions}} or group of Terminated<br>
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| Transactions.|Definitions|2002}}
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| {{isdaanatomy|Close-out Amount}}
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| {{isia}}
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| *{{isdaprov|Market Quotation}}
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| *{{isdaprov|Loss}}
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