List of Events of Default - GMSLA Provision
GMSLA Anatomy™
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The dog that didn't bark in the nighttime
Most interesting is what is not in there: There is no:
- Cross Default
- Default under Specified Transaction equivalent
- Credit Support Default equivalent
- Merger without Assumption equivalent
- Illegality equivalent
- Tax Event equivalent
- Credit Event upon Merger equivalent
- Tax Event upon Merger equivalent
Why not?: Unlike an ISDA Master Agreement, generally, transactions under a GMSLA are callable on notice. If your counterparty suffes any kind of credit deterioration, your option is to immediately recall your loans. If they redeliver—great. If they don’t, you have them bang to rights on a failure to pay or deliver. Simples.