82,891
edits
Merger Without Assumption - ISDA Provision: Difference between revisions
Merger Without Assumption - ISDA Provision (view source)
Revision as of 15:17, 21 November 2019
, 21 November 2019no edit summary
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 6: | Line 6: | ||
If the {{isdama}} and its extant {{isdaprov|Transactions}} carry across — which in a plain [[merger]], they ought to — all well and good.<ref>Though watch out for traps: what if ''both'' merging companies have {{isda}}s with the same counterparty, but on markedly different terms? Which prevails? Do they both? Which one do you use for new {{isdaprov|Transaction}}s? This you will have to hammer out across the negotiating table.</ref> | If the {{isdama}} and its extant {{isdaprov|Transactions}} carry across — which in a plain [[merger]], they ought to — all well and good.<ref>Though watch out for traps: what if ''both'' merging companies have {{isda}}s with the same counterparty, but on markedly different terms? Which prevails? Do they both? Which one do you use for new {{isdaprov|Transaction}}s? This you will have to hammer out across the negotiating table.</ref> | ||
But in some cases the Transactions might not carry across. Perhaps the resulting entity has no [[Ultra vires|power]] to transact swaps. Perhaps it is in a jurisdiction in which | But in some cases the Transactions might not carry across. Perhaps the resulting entity has no [[Ultra vires|power]] to transact swaps. Perhaps it is in a jurisdiction in which they — or ISDA’s sainted [[close-out netting]] provisions, about which so many tears and so much blood is annually spilled — cannot be enforced. Perhaps it just refuses to honour them: the ISDA’s {{isdaprov|Merger Without Assumption}} addresses all of those contingencies. | ||
This is the clause that would have been covered Section {{isdaprov|5(a(ii)}}(2) {{isdaprov|repudiation}}, ''had the resulting entity accepted the contract at all in the first place''. It can be triggered if the resulting party [[repudiate|repudiates]] ''any'' outstanding {{isdaprov|Transactions}} under the {{isdama}} (or otherwise they are not binding on it); or any {{isdaprov|Credit Support Document}} stops working as a result of the merger. | |||
This is the clause that would have been covered by Section {{isdaprov|5(a)(ii)}}(2) {{isdaprov|repudiation}}, ''had the resulting entity accepted the contract at all in the first place''. It can be triggered if the resulting party [[repudiate|repudiates]] ''any'' outstanding {{isdaprov|Transactions}} under the {{isdama}} (or otherwise they are not binding on it); or any {{isdaprov|Credit Support Document}} stops working as a result of the merger. | |||
===And “[[all or substantially all]]” means?=== | ===And “[[all or substantially all]]” means?=== | ||