Reference Entity - Credit Derivatives Provision

From The Jolly Contrarian
Jump to navigation Jump to search
2014 ISDA Credit Derivatives Definitions

A Jolly Contrarian owner’s manual™

2.1 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.

2.1 in all its glory

Section 2.1 Reference Entity. “Reference Entity” means the entity specified as such in the related Confirmation. Any Successor to the Reference Entity either (a) identified by the Calculation Agent pursuant to Section 2.2 (Provisions for Determining a Successor) on or following the Trade Date, or (b) identified pursuant to a DC Resolution in respect of a Successor Resolution Request Date and publicly announced by the DC Secretary on or following the Trade Date shall, in each case, with effect from the Succession Date, be the Reference Entity for the relevant Credit Derivative Transaction or a New Credit Derivative Transaction (as determined pursuant to such Section 2.2 (Provisions for Determining a Successor)).

Resources and Navigation



Template:M comp disc Credit Derivatives 2.1



The person against whose collapse you are hedging. This will generally be the issuer of a listed debt security — a Bond — or at a pinch, a relatively public syndicated Loan. A straightforward enough notion, complicated by the tendency for corporates to be taken over from time to time. What happens, for example, when Credit Suisse, for some years now a basket case of a credit, with CDS spreads trading widely, becomes such a basket-case that, to stave off Bankruptcy, it is acquired lock, stock and barrel by UBS? Is UBS a Successor, and what should a credit derivative trader, who wisely bought protection on Lucky make of that its sudden return to comparative wellbeing in the arms of its rescuer?

Premium content

Here the free bit runs out. Subscribers click 👉 here. New readers sign up 👉 here and, for ½ a weekly 🍺 go full ninja about all these juicy topics 👇
  • The JC’s famous Nutshell summary of this clause

Template:M premium Credit Derivatives 2.1


See also


Template:M sa Credit Derivatives 2.1