Interest Amount - CSA Provision: Difference between revisions

Revision as of 15:25, 13 January 2017

CSA Anatomy™

“Interest Amount” means, with respect to an Interest Period, the aggregate sum of the Base Currency Equivalents of the amounts of interest determined for each relevant currency and calculated for each day in that Interest Period on the principal amount of the portion of the Credit Support Balance comprised of cash in such currency, determined by the Valuation Agent for each such day as follows:

(x) the amount of cash in such currency on that day; multiplied by

(y) the relevant Interest Rate in effect for that day; divided by

(z) 360 (or, in the case of pounds sterling, 365).

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“Interest Amount (VM)” means with respect to an Interest Period, the aggregate sum of the Base Currency Equivalents of the amounts of interest determined for each relevant currency and calculated for each day in that Interest Period on the portion of the Credit Support Balance (VM) comprised of cash in such currency, determined by the Valuation Agent for each such day as follows:

(i) the amount of cash in such currency on that day plus, only if “Daily Interest Compounding” is specified as applicable in Paragraph 11(g)(iii), the aggregate of each Interest Amount (VM) determined for each preceding day, if any, in that Interest Period; multiplied by

(ii) the relevant Interest Rate (VM) in effect for that day; divided by

(iii) 360 (or, in the case of pounds sterling or any other currency specified as an “A/365 Currency” in Paragraph 11(g)(i), 365),

provided that, unless “Negative Interest” is specified as applicable in Paragraph 11(g)(iii), if the Interest Amount (VM) for an Interest Period would be a negative amount, it will be deemed to be zero.

(View Template)

Resources Full wikitext \| Nutshell wikitext English Law \| 1 Interpretation \| 2 Credit Support Obligations \| 3 Transfers, Calculations and Exchanges \| 4 Dispute Resolution \| 5 Transfer of Title, No Security Interest, Distributions and Interest Amount \| 6 Default \| 7 Representation \| 8 Expenses \| 9 Miscellaneous \| 10 Definitions \| 11 Elections and Variables · Base Currency and Eligible Currency · Credit Support Obligations · Valuation and Timing · Exchange Date · Dispute Resolution · Distributions and Interest Amount · Addresses for Transfers · Credit Support Offsets · Other CSA 2018 ISDA Credit Support Deed for Initial Margin Index: Click ᐅ to expand: CSA

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The sole observable changes between the 1995 CSA and the 2016 VM CSA are, as best as this poor boy can fathom, these:

the (rather tedious) expression “... on the principal amount of the portion of the Credit Support Balance” amount has been massaged to the slightly more elegant “...on the portion of the Credit Support Balance”, although you’d have to say this is mostly likely to be a drafting error rather than some kind of late-life Damascene conversion in ISDA's part to the merits of plain English;
the last paragraph contemplates currencies other than sterling having an Act/365 day count fraction;
The negative interest rates guff.

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-{{fullanat2|csa|Interest Amount|1995|Interest Amount|2016}} The sole observable changes between the {{1995csa}} and the {{2016csa}} are, as best as this poor boy can fathom, these:
+{{fullanat2|csa|Interest Amount|1995|Interest Amount|2016}}The sole observable changes between the {{1995csa}} and the {{2016csa}} are, as best as this poor boy can fathom, these:
+*the (rather tedious) expression “... on the principal amount of the portion of the {{csaprov|Credit Support Balance}}” amount has been massaged to the slightly more elegant “...on the portion of the {{csaprov|Credit Support Balance}}”, although you’d have to say this is mostly likely to be a drafting error rather than some kind of late-life Damascene conversion in {{tag|ISDA}}'s part to the merits of {{tag|plain English}};
+*the last paragraph contemplates currencies other than [[sterling]] having an [[Act/365]] [[day count fraction]];
+*The [[negative interest rates]] guff.