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Default Under Specified Transaction - ISDA Provision: Difference between revisions
Default Under Specified Transaction - ISDA Provision (view source)
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==Commentary== | ==Commentary== | ||
This is like {{isdaprov|Cross Default}}, but for non "borrowing" style transactions - for example [[swap|swap agreements]] agreements and [[repo]]s, '''but only transactions between the two counterparties and their referenced {{isdaprov|Credit Support Provider}}s and {{isdaprov|Specified Entities}}'''. | This is like {{isdaprov|Cross Default}}, but for non "borrowing" style transactions - for example [[swap|swap agreements]] agreements and [[repo]]s, '''but only transactions between the two counterparties and their referenced {{isdaprov|Credit Support Provider}}s and {{isdaprov|Specified Entities}}'''. | ||
The reason for the "three limb" definition is that a default on a final payment under a transaction can't (obviously) give rise to an "Acceleration" of the obligation because at that point, QED, the obligation is already due. | |||
If a [[Counterparty]] (or its {{isdaprov|Credit Support Provider}} or {{isdaprov|Specified Entity}}) experiences an {{isdaprov|Event of Default}} under a [[swap]] agreement (or other transaction falling within the definition of {{isdaprov|Specified Transaction}}, which is typically wide - but check the agreement!) with you, this constitutes an {{isdaprov|Event of Default}} under the ISDA. | If a [[Counterparty]] (or its {{isdaprov|Credit Support Provider}} or {{isdaprov|Specified Entity}}) experiences an {{isdaprov|Event of Default}} under a [[swap]] agreement (or other transaction falling within the definition of {{isdaprov|Specified Transaction}}, which is typically wide - but check the agreement!) with you, this constitutes an {{isdaprov|Event of Default}} under the ISDA. | ||