ISDA Comparison: Difference between revisions

ISDA Comparison (view source)

Revision as of 10:37, 24 September 2020

2,011 bytes removed , 24 September 2020

no edit summary

Amwelladmin

Bureaucrats, Interface administrators, Administrators

82,891

edits

@@ Line 31: / Line 31: @@
 :*For an involuntary {{isdaprov|Bankruptcy}} filing pursuant to Section {{isdaprov|5(a)(vii)}}(1)(B) from 30 to 15days.
 *'''{{isdaprov|Breach of Agreement}}''': An additional subsection has been added to the {{isdaprov|Breach of Agreement}} {{isdaprov|Event of Default}} (Section {{isdaprov|5(a)(ii)}} that establishes an {{isdaprov|Event of Default}} when “the party disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, this Master Agreement, any {{isdaprov|Confirmation}} executed and delivered by that party or any {{isdaprov|Transaction}} evidenced by such a {{isdaprov|Confirmation}} (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf).” Although this additional subsection is part of Section {{isdaprov|5(a)(ii)}}, the 30 day cure period applies only to Section {{isdaprov|5(a)(ii)}}(1) and not to the new subparagraph (2). This new {{isdaprov|Event of Default}} is similar to the {{isdaprov|Credit Support Default}} {{isdaprov|Event of Default}} in Section {{isdaprov|5(a)(iii)}}(3) of the {{1992isda}}, which was also included in the {{2002isda}}.
-*'''{{isdaprov|Default under Specified Transaction}}''': This {{isdaprov|Event of Default}} was expanded in five significant ways:
+*{{isda 5(a)(v) comm}}
-#Delivery and other general defaults require the liquidation or early termination of the {{isdaprov|Specified Transaction}} (for general defaults) or the liquidation or early termination of all outstanding {{isdaprov|Transaction}}s under the documentation supporting the {{isdaprov|Specified Transaction}} (for a delivery default). This change was made with [[repo]]s and [[stock loan]]s in mind because a failure under a repo is not uncommon and may not be indicative of the {{isdaprov|Defaulting Party}}’s creditworthiness, particularly when the default concerns delivery obligations.
-#This {{isdaprov|Event of Default}} may now be triggered by a default under a credit support arrangement relating to a {{isdaprov|Specified Transaction}} . {{isdaprov|Specified Transaction}} credit support arrangements were not addressed in the {{1992isda}}.
-# As discussed above, the cure period for the failure to make a final payment or early termination payment in respect of a {{isdaprov|Specified Transaction}} has been reduced from three days to one.
-#The [[repudiation]] subsection was modified in two significant ways:  (i) the phrase “or challenges the validity of” was added after “disaffirms, disclaims, repudiates or rejects” to reduce ambiguity as to whether a party’s action constitutes a repudiation; and (ii) a Non-{{isdaprov|Defaulting Party}} is now required to possess evidence of such repudiation that is executed and delivered by the {{isdaprov|Defaulting Party}}, its Credit Support Provider, or a Specified Entity; (iii) The definition of {{isdaprov|Specified Transaction}} has been broadened to include additional types of {{isdaprov|Transaction}}s market participants commonly add to Schedules to the Master Agreement, such as repos, and includes a catchall clause designed to include any future derivative products that are not specifically enumerated in this definition.
 *'''{{isdaprov|Cross Default}}''': The formula for determining a {{isdaprov|Cross Default}} has been revised to permit the aggregation of amounts owed under multiple defaults. In determining whether the {{isdaprov|Cross Default}} threshold has been exceeded, the principal amount of the accelerated obligations in subparagraph (i) and the unpaid amount under subparagraph (ii) are added together to determine whether the {{isdaprov|Cross Default}} threshold has been exceeded. In the {{1992isda}}, subparagraphs (i) and (ii) could not be combined to evidence a {{isdaprov|Cross Default}}.
 *'''{{isdaprov|Merger Without Assumption}}''': The types of events that constitute a “[[merger]]” have been broadened to include reorganization, reincorporation and reconstitution, and the methods by which a resulting, surviving or transferee entity can assume obligations have been deleted.