New Credit Derivative Transactions - Credit Derivatives Provision

2014 ISDA Credit Derivatives Definitions A Jolly Contrarian owner’s manual™ 2.2(n) in a Nutshell™ The JC’s Nutshell™ summary of this term has moved uptown to the subscription-only ninja tier. For the cost of ½ a weekly 🍺 you can get it here. Sign up at Substack. 2.2(n) in all its glory 2.2(n) Where, pursuant to Section 2.2(a)(iii), (iv) or (vi), more than one Successor has been identified, the relevant Credit Derivative Transaction will be divided, with effect from the Succession Date, into the same number of New Credit Derivative Transactions (the “New Credit Derivative Transactions”) as there are Successors, with the following terms: (i) each Successor will be the Reference Entity for the purposes of one of the New Credit Derivative Transactions; (ii) in respect of each New Credit Derivative Transaction, the Fixed Rate Payer Calculation Amount, if any, and the Floating Rate Payer Calculation Amount will be the Fixed Rate Payer Calculation Amount and the Floating Rate Payer Calculation Amount, as applicable, of the original Credit Derivative Transaction divided by the number of Successors; and (iii) all other terms and conditions of the original Credit Derivative Transaction will be replicated in each New Credit Derivative Transaction except that the Calculation Agent (in consultation with the parties) shall make such modifications as it determines are required in order to preserve the economic effects of the original Credit Derivative Transaction in the New Credit Derivative Transactions (considered in aggregate). edit Resources and Navigation Resources (full wikitext) | (nutshell wikitext) | Anatomy | Narrowly-tailored credit event | Equity v credit derivatives showdown Index: Click ᐅ to expand: Credit Derivatives Premium version of this page

Overview

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What happens when Relevant Obligations of your expiring, de-merging or transmogrifying Reference Entity are succeeded by more than one entity in a way that the ISDA’s crack drafting squad™ could not find in its heart to assign to a single Successor. You split the transaction between the Successors.

The process for determining a Successor, by the way, is a doozy.

Summary

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• The JC’s famous Nutshell™ summary of this clause

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See also

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• Successor