Attribution of Collateral to Loans - GMSLA Provision: Difference between revisions

Attribution of Collateral to Loans - GMSLA Provision (view source)

310 bytes removed , 29 May 2015

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 {{gmslasnap|5.7}}
 ====Commentary====
-In a nutshell:
+{{nuts|GMSLA|5.7}}
-{{box|Where Equivalent Collateral is delivered and the Parties have not agreed otherwise it will be attributed to the earliest outstanding Loan up to the point at which the Market Value of Collateral for that Loan equals its Required Collateral Value, and then to the next earliest outstanding Loan and so on.}}
 This is a key provision in terms of the {{tag|GMSLA}} {{tag|Netting}} analysis because it provides a means for ascertaining the particular collateral that is attributable to a given {{gmslaprov|Loan}}, which means that, should you decide to voluntarily terminate all {{gmslaprov|Loans}} as a prelude to a [[close-out netting|close out]], there is certainty as to what Collateral attaches to what loan, and you can therefore determine the [[Default Market Value]] and so on.