NAV trigger: Difference between revisions

NAV trigger (view source)

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	{{a\|~~negotiation~~\|}}The right to terminate a {{tag\|master agreement}} as a result of the decline in [[net asset value]] of a [[hedge fund]] counterparty (other counterparty types generally won't have a “[[net asset value]]” ''to'' trigger).		{{a\|pb\|}}The right to terminate a {{tag\|master agreement}} as a result of the decline in [[net asset value]] of a [[hedge fund]] counterparty (other counterparty types generally won't have a “[[net asset value]]” ''to'' trigger).

	Like most [[events of default]], [[NAV trigger]]s are a second-order derivative for the only really important type of default: a [[failure to pay]]. A significant decline in [[NAV]] makes a payment default ''more likely''. [[NAV]] declines in three main ways:		Like most [[events of default]], [[NAV trigger]]s are a second-order derivative for the only really important type of default: a [[failure to pay]]. A significant decline in [[NAV]] makes a payment default ''more likely''. [[NAV]] declines in three main ways: