Events of Default (Early Termination Payments) - ISDA Provision: Difference between revisions

The effect of this is that in closing out an ISDA, the first step is to terminate all {{isdaprov|transaction}}s to arrive at a {{isdaprov|Close-out Amount}}<ref>The Close-out Amont is basically the replacement cost for the Transaction, and will therefore assume past payments have all been made. Hence the concept of Unpaid Amounts, being amounts that should have been paid or delivered by the time of termination, but were not (hence, we presume, why good sir is closing out the {{isdaprov|Transaction}} in the first place). Note that, to avoid [[double-counting]], the definition of {{isdaprov|Close-out Amount}} explicity ignores the effect of any {{isdaprov|Unpaid Amount}}s under a {{isdaprov|Transaction}}.</ref> for each one, then figure out if there were any {{isdaprov|Unpaid Amount}}s that were due under {{isdaprov|Transaction}}s but had not been paid at the time the {{isdaprov|Transaction}}s terminated. The close out happens under Section {{isdaprov|6(e)}} of the {{isdama}} itself and the recourse is to a net sum. Netting does ''not'' happen under the {{isdaprov|Transactions}} — on the theory of the game there are no outstanding Transactions at the point of netting; just payables.