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2014 ISDA Credit Derivatives Definitions
A Jolly Contrarian owner’s manual™
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Section 4.6 in a Nutshell™
Use at your own risk, campers!
Section 4.6 Repudiation/Moratorium.
- (a) “Repudiation/Moratorium” means both of the following:
- (i) an authorised officer of the Reference Entity or a Governmental Authority repudiates or imposes an effective moratorium on Obligations totalling at least the Default Requirement and
- (ii) a Failure to Pay or Restructuring (ignoring any Payment Requirement or Default Requirement), occurs under any such Obligation by the Repudiation/Moratorium Evaluation Date.
- (b) “Repudiation/Moratorium Evaluation Date” means, if a Potential Repudiation/Moratorium occurs by the Scheduled Termination Date:
- (i) if the affected Obligations include Bonds, the later of (A) 60 days after the Potential Repudiation/Moratorium and (B) the first Bond payment date after the Potential Repudiation/Moratorium (or, if later, date any Grace Period expiry date) and
- (ii) if they do not include Bonds, 60 days after the Potential Repudiation/Moratorium date;
- provided that, unless the Repudiation/Moratorium Extension Condition is satisfied the Repudiation/Moratorium Evaluation Date must occur by the Scheduled Termination Date.
- (c) “Potential Repudiation/Moratorium” means an event described in Section 4.6(a)(i).
- (d) The “Repudiation/Moratorium Extension Condition” is satisfied if:
- (i) the DC Secretary publicly announces, following a valid request received no later than fourteen calendar days after the Scheduled Termination Date, that the relevant Credit Derivatives Determinations Committee has Resolved that a Potential Repudiation/Moratorium occurred to an Obligation of the Reference Entity on or before the Scheduled Termination Date, or
- (ii) the Notifying Party delivers a Repudiation/Moratorium Extension Notice and, if required, a Notice of Publicly Available Information each effective no later than fourteen calendar days after the Scheduled Termination Date.
- In all cases, the Repudiation/Moratorium Extension Condition will be not be satisfied to the extent that, the DC Secretary publicly announces that the Credit Derivatives Determinations Committee has Resolved that either (A) the event is not a Potential Repudiation/Moratorium, or (B) it is, but it happened after the Scheduled Termination Date .
- (e) “Repudiation/Moratorium Extension Notice” means an irrevocable notice from the Notifying Party describing a Potential Repudiation/Moratorium that occurred by the Scheduled Termination Date containing a reasonably detailed description of the Potential Repudiation/Moratorium has occurred and indicate the date of the occurrence. The Potential Repudiation/Moratorium that is the subject of the Repudiation/Moratorium Extension Notice need not be continuing on the date the Repudiation/Moratorium Extension Notice is effective. A form of Repudiation/Moratorium Extension Notice is set forth in Exhibit D.
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Full text of Section 4.6
Section 4.6 Repudiation/Moratorium.
- (a) “Repudiation/Moratorium” means the occurrence of both of the following events:
- (i) an authorized officer of the Reference Entity or a Governmental Authority (A) disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, one or more Obligations in an aggregate amount of not less than the Default Requirement or (B) declares or imposes a moratorium, standstill, roll-over or deferral, whether de facto or de jure, with respect to one or more Obligations in an aggregate amount of not less than the Default Requirement; and
- (ii) a Failure to Pay, determined without regard to the Payment Requirement, or a Restructuring, determined without regard to the Default Requirement, with respect to any such Obligation occurs on or prior to the Repudiation/Moratorium Evaluation Date.
- (b) “Repudiation/Moratorium Evaluation Date” means, if a Potential Repudiation/Moratorium occurs on or prior to the Scheduled Termination Date (i) if the Obligations to which such Potential Repudiation/Moratorium relates include Bonds, the date that is the later of (A) the date that is sixty days after the date of such Potential Repudiation/Moratorium and (B) the first payment date under any such Bond after the date of such Potential Repudiation/Moratorium (or, if later, the expiration date of any applicable Grace Periodin respect of such payment date) and (ii) if the Obligations to which such Potential Repudiation/Moratorium relates do not include Bonds, the date that is sixty days after the date of such Potential Repudiation/Moratorium; provided that, in either case, the Repudiation/Moratorium Evaluation Date shall occur no later than the Scheduled Termination Date unless the Repudiation/Moratorium Extension Condition is satisfied.
- (c) “Potential Repudiation/Moratorium” means the occurrence of an event described in Section 4.6(a)(i).
- (d) The “Repudiation/Moratorium Extension Condition” is satisfied (i) if the DC Secretary publicly announces, pursuant to a valid request that was delivered and effectively received on or prior to the date that is fourteen calendar days after the Scheduled Termination Date, that the relevant Credit Derivatives Determinations Committee has Resolved that an event that constitutes a Potential Repudiation/Moratorium for purposes of the relevant Credit Derivative Transaction has occurred with respect to an Obligation of the Reference Entity and that such event occurred on or prior to the Scheduled Termination Date, or (ii) otherwise, by the delivery by the Notifying Party to the other party of a Repudiation/Moratorium Extension Notice and, unless “Notice of Publicly Available Information” is specified as not applicable in the related Confirmation, a Notice of Publicly Available Information that are each effective on or prior to the date that is fourteen calendar days after the Scheduled Termination Date. In all cases, the Repudiation/Moratorium Extension Condition will be deemed not to have been satisfied, or not capable of being satisfied, if, or to the extent that, the DC Secretary publicly announces that the relevant Credit Derivatives Determinations Committee has Resolved that either (A) an event does not constitute a Potential Repudiation/Moratorium for purposes of the relevant Credit Derivative Transaction with respect to an Obligation of the Reference Entity, or (B) an event that constitutes a Potential Repudiation/Moratorium for purposes of the relevant Credit Derivative Transaction has occurred with respect to an Obligation of the Reference Entity but that such event occurred after the Scheduled Termination Date .
- (e) “Repudiation/Moratorium Extension Notice” means an irrevocable notice from the Notifying Party to the other party that describes a Potential Repudiation/Moratorium that occurred on or prior to the Scheduled Termination Date . A Repudiation/Moratorium Extension Notice must contain a description in reasonable detail of the facts relevant to the determination that a Potential Repudiation/Moratorium has occurred and indicate the date of the occurrence. The Potential Repudiation/Moratorium that is the subject of the Repudiation/Moratorium Extension Notice need not be continuing on the date the Repudiation/Moratorium Extension Notice is effective. A form of Repudiation/Moratorium Extension Notice is set forth in Exhibit D.
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