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Cross Default - ISDA Provision: Difference between revisions
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Cross Default - ISDA Provision (view source)
Revision as of 18:00, 4 December 2015
, 4 December 2015→Measure of the Threshold
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===The difference between the two formulations=== | ===The difference between the two formulations=== | ||
====Measure of the Threshold==== | ====Measure of the Threshold==== | ||
* | *'''The 1992 Version''': This contemplates default ''in an aggregate '''amount''''' exceeding the {{isdaprov|Threshold Amount}} which would justify early termination of the {{isdaprov|Specified Indebtedness}} - that is to say the defaulted payment contributes to the {{isdaprov|Threshold Amount}}, not the principal amount of the Specified Indebtedness itself; | ||
* | *'''The 2002 Version''': This contemplates an [[event of default]] under agreements whose “'''aggregate principal amount'''” is greater than the Threshold Amount: that is to say it is the ''whole principal amount'' of the agreement which is picked up, not just the amount of the payment. | ||
This change, we speculate, is meant to fix a howler of a drafting lapse: | This change, we speculate, is meant to fix a howler of a drafting lapse: | ||
*It can be triggered by any [[event of default]], not just a payment default (I.e. the 1992 wording "''an event of default ... in an amount equal to...''" impliedly limits the clause to payment defaults only); | *It can be triggered by any [[event of default]], not just a payment default (I.e. the 1992 wording "''an event of default ... in an amount equal to...''" impliedly limits the clause to payment defaults only, since other defaults aren't "in an amount"...); | ||
*It captures the whole size of the {{isdaprov|Specified Indebtedness}}, not just the value of the defaulted payment (if it even ''is'' a payment) itself. | *It captures the whole size of the {{isdaprov|Specified Indebtedness}}, not just the value of the defaulted payment (if it even ''is'' a payment) itself. | ||