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Template:M summ 2002 ISDA 5(a)(v): Difference between revisions
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Template:M summ 2002 ISDA 5(a)(v) (view source)
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{{Dust capsule}} | {{Dust capsule}} | ||
=== | ===Voltaire and [[DUST]]=== | ||
In which {{icds}} got bogged down in the weeds once in [[1987 ISDA Interest Rate and Currency Exchange Agreement|1987]], and we’ve been dealing with resulting confusion ever since. A case of [[Voltaire’s maxim|perfection being the enemy of good enough]], as Voltaire would say, in our humble opinion. | In which {{icds}} got bogged down in the weeds once in [[1987 ISDA Interest Rate and Currency Exchange Agreement|1987]], and we’ve been dealing with resulting confusion ever since. A case of [[Voltaire’s maxim|perfection being the enemy of good enough]], as Voltaire would say, in our humble opinion. | ||
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*Counterparty fails to pay amounts falling due ''before'' maturity on a {{isdaprov|Specified Transaction}}, and you [[accelerate]] ''that'' transaction, but not necessarily others under the same [[master agreement]]. Here the principle is that ''any'' obligation to pay a sum of money on time is [[Fundamental breach|fundamental]], [[Time is of the essence|of the essence]] and speaks indelibly to a merchant’s credit, whether or not one accelerates other related Specified Transactions (though, actually, walk me through the scenarios in which you wouldn’t, or even weren’t ''obliged'' to?) | *Counterparty fails to pay amounts falling due ''before'' maturity on a {{isdaprov|Specified Transaction}}, and you [[accelerate]] ''that'' transaction, but not necessarily others under the same [[master agreement]]. Here the principle is that ''any'' obligation to pay a sum of money on time is [[Fundamental breach|fundamental]], [[Time is of the essence|of the essence]] and speaks indelibly to a merchant’s credit, whether or not one accelerates other related Specified Transactions (though, actually, walk me through the scenarios in which you wouldn’t, or even weren’t ''obliged'' to?) | ||
*Counterparty fails to pay amounts falling due ''at'' maturity on a {{isdaprov|Specified Transaction}}, so you can’t “accelerate” as such on ''that'' {{isdaprov|Specified Transaction}}, as it has matured, but you are still out of pocket and of a mind to press a big red button; | *Counterparty fails to pay amounts falling due ''at'' maturity on a {{isdaprov|Specified Transaction}}, so you can’t “accelerate” as such on ''that'' {{isdaprov|Specified Transaction}}, as it has matured, but you are still out of pocket and of a mind to press a big red button; | ||
*Counterparty [[Failure to deliver|fails to ''deliver'']] assets due under a {{isdaprov|Specified Transaction}}, and as a result you accelerate ''''all''''' {{isdaprov|Specified Transaction}}s under the affected [[master agreement]] (ie not just ''that'' transaction) — this is designed to carve out things like [[mini close-out]] under a {{gmsla}} as these are not credit-related; | *Counterparty [[Failure to deliver|fails to ''deliver'']] assets due under a {{isdaprov|Specified Transaction}}, and as a result you accelerate '''''all''''' {{isdaprov|Specified Transaction}}s under the affected [[master agreement]] (ie not just ''that'' transaction) — this is designed to carve out things like [[mini close-out]] under a {{gmsla}} as these are not credit-related; | ||
*Counterparty [[Repudiation|presents you an extended middle finger]] generally with regard to any obligation under any Specified Transaction, whether you accelerate it or not. Here if your counterparty is playing craziest dude in the room, it has committed a [[repudiatory breach]] thereby losing what moral high-ground it might otherwise stand on to expect you to follow form and protocol before closing it out. | *Counterparty [[Repudiation|presents you an extended middle finger]] generally with regard to any obligation under any Specified Transaction, whether you accelerate it or not. Here if your counterparty is playing craziest dude in the room, it has committed a [[repudiatory breach]] thereby losing what moral high-ground it might otherwise stand on to expect you to follow form and protocol before closing it out. | ||