Credit Support Provider - ISDA Provision

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2002 ISDA Master Agreement

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Credit Support Provider in a Nutshell

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Credit Support Provider in all its glory

Credit Support Provider” has the meaning specified in the Schedule.

Related agreements and comparisons

Click here for the text of Section Credit Support Provider in the 1992 ISDA
Template:Isdadiff Credit Support Provider

Resources and Navigation

This provision in the 1992

Resources Wikitext | Nutshell wikitext | 1992 ISDA wikitext | 2002 vs 1992 Showdown | 2006 ISDA Definitions | 2008 ISDA | JC’s ISDA code project
Navigation Preamble | 1(a) (b) (c) | 2(a) (b) (c) (d) | 3(a) (b) (c) (d) (e) (f) (g) | 4(a) (b) (c) (d) (e) | 55(a) Events of Default: 5(a)(i) Failure to Pay or Deliver 5(a)(ii) Breach of Agreement 5(a)(iii) Credit Support Default 5(a)(iv) Misrepresentation 5(a)(v) Default Under Specified Transaction 5(a)(vi) Cross Default 5(a)(vii) Bankruptcy 5(a)(viii) Merger Without Assumption 5(b) Termination Events: 5(b)(i) Illegality 5(b)(ii) Force Majeure Event 5(b)(iii) Tax Event 5(b)(iv) Tax Event Upon Merger 5(b)(v) Credit Event Upon Merger 5(b)(vi) Additional Termination Event (c) (d) (e) | 6(a) (b) (c) (d) (e) (f) | 7 | 8(a) (b) (c) (d) | 9(a) (b) (c) (d) (e) (f) (g) (h) | 10 | 11 | 12(a) (b) | 13(a) (b) (c) (d) | 14 |

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The concept dates from the 1992 ISDA, but, we think, the terminology creates far more confusion than it really needed to.



A Credit Support Provider is basically a guarantor: a third party who stands being the obligations of a counterparty to the ISDA Master Agreement. Usually this is someone providing an all obligations guarantee or a standby letter of credit, but on rare occasions — very rare, usually involving espievies — might be a third party directly posting credit support to the other party under a Credit Support Document. In any case it is not a direct counterparty to the ISDA Master Agreement itself, whether or not the CSA counts as a Credit Support Document.

Given that a 1995 CSA is not a Credit Support Document at all, but a Transaction under the ISDA Master Agreement, a party to it is obviously not a Credit Support Provider.

A 1994 New York law CSA, on the other hand, is a Credit Support Document though. So should a Party to the ISDA Master Agreement, where there is a 1994 New York law CSA, be described as a “Credit Support Provider"?

No, sayeth the User’s Guide to the 1994 NY CSA:

“Parties to an ISDA Master Agreement should not, however, be identified as Credit Support Providers with respect to the Annex, as such term is intended only to apply to third parties.”

the Users’ Guide to the 2002 ISDA is similarly emphatically vague:

“The meaning of “Credit Support Provider” ... should apply to any person or entity (other than either party) providing, or a party to, a Credit Support Document delivered on behalf of a particular party.”

This means that a New York Law CSA — which is not a Transaction under the ISDA architecture, remember, is a Credit Support Document, but the person providing Credit Support under it — is not a “Credit Support Provider”?

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  • The JC’s famous Nutshell summary of this clause
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See also