Events of Default - GMRA Provision: Difference between revisions

Events of Default - GMRA Provision (view source)

956 bytes added , 21 February 2018

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+{{fullanat|gmra|10(a)|2000}}
+===The dog that didn't bark in the nighttime===
+Most interesting is what is '''not''' in there: There is no:
+*[[Cross Default]]
+*{{isdaprov|Default under Specified Transaction}} equivalent
+*{{isdaprov|Credit Support Default}} equivalent
+*{{isdaprov|Merger without Assumption}} equivalent
+*{{isdaprov|Illegality}} equivalent
+*{{isdaprov|Tax Event}} equivalent
+*{{isdaprov|Credit Event Upon Merger}} equivalent
+*{{isdaprov|Tax Event Upon Merger}} equivalent
+'''Why not?''': Unlike an {{isdama}}, generally, {{gmra|transaction}}s under a {{gmra}} are very short dated or even callable on notice. If your counterparty suffes any kind of credit deterioration, your option is to terminate all your repo trades under the ordinary right to do so. If they redeliver—great. If they ''don’t'', you have them bang to rights on a {{gmraprov|failure to pay or deliver}}. Simples.
+It's a similar story under the {{gmsla}} by the way.
 {{gmrasnap|10(a)}}