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Conceivably you ''could'' invoke a flawed asset provision even if you were [[in-the-money]], but you would be mad to. | Conceivably you ''could'' invoke a flawed asset provision even if you were [[in-the-money]], but you would be mad to. | ||
====Which events?==== | ====Which events?==== | ||
Exactly ''which'' default events can trigger a flawed asset clause will depend on the contract. Under the | Exactly ''which'' default events can trigger a flawed asset clause will depend on the contract. Under the ISDA, {{{{{1}}}|Events of Default}} and even ''Potential'' {{{{{1}}}|Events of Default}} do, but {{{{{1}}}|Termination Event}}s and {{{{{1}}}|Additional Termination Event}}s do not. | ||
This is because most Termination Events are softer, “hey look, it’s no-one’s fault, it’s just one of those things” kind of closeouts — but this is not really true of {{{{{1}}}|Additional Termination Event}}s, which tend to be credit-driven and girded with more “culpability” and “event-of-defaulty-ness”. | |||
This is, a bit dissonant, but there are far greater dissonances, so we park this one and carry on. | |||
====2(a)(iii) in a time of Credit Support==== | ====2(a)(iii) in a time of Credit Support==== |