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Credit Support Document - ISDA Provision: Difference between revisions
Credit Support Document - ISDA Provision (view source)
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Note also the pitfalls of providing [[Guarantee]]s with respect to individual {{isdaprov|Transaction}}s under an {{isdama}}. It doesn't work. [[Guarantee|Here's why]]. | Note also the pitfalls of providing [[Guarantee]]s with respect to individual {{isdaprov|Transaction}}s under an {{isdama}}. It doesn't work. [[Guarantee|Here's why]]. | ||
==[[Guarantees]] under the {{isdama}} and why a Transaction- | ==[[Guarantees]] under the {{isdama}} and why a {{isdaprov|Transaction}}-specific {{isdaprov|guarantee}} is a bad idea== | ||
{{isdaguaranteewarning}} | |||
Should a client request a transaction-specific parental guarantee under an {{isdama}} instead of the usual “all obligations” guarantee of all obligations under the {{isdama}} and all transactions under it, escalate immediately. | Should a client request a transaction-specific parental guarantee under an {{isdama}} instead of the usual “all obligations” guarantee of all obligations under the {{isdama}} and all transactions under it, escalate immediately. | ||
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*Therefore, if the guarantee relates to the single {{isdaprov|Transaction}} only, at precisely the point you wish to rely on it (i.e., upon the party’s default), it will vanish. Same goes for Letters of Credit. | *Therefore, if the guarantee relates to the single {{isdaprov|Transaction}} only, at precisely the point you wish to rely on it (i.e., upon the party’s default), it will vanish. Same goes for Letters of Credit. | ||
{{isdaanatomy}} | {{isdaanatomy}} | ||