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Cross Default - ISDA Provision: Difference between revisions
Cross Default - ISDA Provision (view source)
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, 4 December 2015→Measure of the Threshold
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* 2002 formulation talks about default under agreements where the “aggregate principal amount” of the agreements is not less than the Threshold Amount. | * 2002 formulation talks about default under agreements where the “aggregate principal amount” of the agreements is not less than the Threshold Amount. | ||
This is a seemingly innocuous change intended to clarify a drafting lapse that, for example, of you defaulted on a (relatively small) interest payment on a loan, which then made the whole loan repayable, you could only count the value of the defaulted interest payment to your threshold, when in reality the whole size of the loan is in jeopardy, and really should have been what was counted. It is innocuous, that is, unless you are cavalier enough to include derivatives in your definition of {{isdaprov|Specified Indebtedness}}. But if you do that, you've bought yourself a wild old ride anyway. | This is a seemingly innocuous change intended to clarify a drafting lapse that, for example, of you defaulted on a (relatively small) interest payment on a loan, which then made the whole loan repayable, you could only count the value of the defaulted interest payment to your threshold, when in reality the whole size of the loan is in jeopardy, and really should have been what was counted. It is innocuous, that is, unless you are cavalier enough to include derivatives in your definition of {{isdaprov|Specified Indebtedness}}. But if you do that, you've bought yourself a wild old ride anyway. | ||
====Clarifies that you have to account for the grace period==== | |||
*1992 formulation talks about a default on a payment "on the due date thereof" in aggregate amount of at least the Threshold Amount; | |||
*2002 formulation talks about default on a payment "on the due date for payment (after giving effect to any applicable | |||
notice requirement or grace period)" | |||
===General=== | ===General=== | ||