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Additional Termination Event - ISDA Provision: Difference between revisions
Additional Termination Event - ISDA Provision (view source)
Revision as of 16:22, 23 September 2016
, 23 September 2016→Tricks for the Young Players
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==Tricks for the Young Players== | ==Tricks for the Young Players== | ||
{{isdaprov|Termination Event}} is defined as | {{isdaprov|Termination Event}} is defined as “an {{isdaprov|Illegality}}, a {{isdaprov|Tax Event}} or a {{isdaprov|Tax Event Upon Merger}} or, if specified to be applicable, a {{isdaprov|Credit Event Upon Merger}} or an {{isdaprov|Additional Termination Event}}”. | ||
'''Best Practice Note''': Therefore adding any new {{isdaprov|Termination Event}} must ALWAYS be achieved by labelling it a new | '''Best Practice Note''': Therefore adding any new {{isdaprov|Termination Event}} must ALWAYS be achieved by labelling it a new {{isdaprov|Additional Termination Event}} under Section {{isdaprov|5(b)(v)}}, and not a separate event under a new Section {{isdaprov|5(b)(vi)}} etc. | ||
If, instead of being expressed as an “{{isdaprov|Additional Termination Event}}” under section {{isdaprov|5(b)(v)}}, which is how the ISDA Mechanism is intended to operate, it is set out as a new “{{isdaprov|5(b)(vi)}}” it is not designated therefore as any of an “{{isdaprov|Illegality}}”, “{{isdaprov|Tax Event}}”, “{{isdaprov|Tax Event Upon Merger}}”, “{{isdaprov|Credit Event Upon Merger}}” or “{{isdaprov|Additional Termination Event}}”, so therefore, read literally, is not caught by the definition of “{{isdaprov|Termination Event}}” and none of the Termination provisions bite on it. | If, instead of being expressed as an “{{isdaprov|Additional Termination Event}}” under section {{isdaprov|5(b)(v)}}, which is how the ISDA Mechanism is intended to operate, it is set out as a new “{{isdaprov|5(b)(vi)}}” it is not designated therefore as any of an “{{isdaprov|Illegality}}”, “{{isdaprov|Tax Event}}”, “{{isdaprov|Tax Event Upon Merger}}”, “{{isdaprov|Credit Event Upon Merger}}” or “{{isdaprov|Additional Termination Event}}”, so therefore, read literally, is not caught by the definition of “{{isdaprov|Termination Event}}” and none of the Termination provisions bite on it. | ||
I mention this because I have seen it happen. Yes,you can take a | I mention this because I have seen it happen. Yes,you can take a “fair, large and liberal view” that what the parties intended was to create an {{isdaprov|ATE}}, but why suffer that anxiety? | ||
{{isdaanatomy}} | {{isdaanatomy}} | ||