Mini close-out - GMSLA Provision: Difference between revisions

Mini close-out - GMSLA Provision (view source)

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 {{gmslasnap|9}}
-Mini closeout is the method of terminating a {{gmsla}} or an {{osla}} in a way which ensures maximum efficacy of [[close-out netting]] in a [[gross jurisdiction]].
+{{comm}}
+Mini close-out is the method of terminating an individual {{gmslaprov|Loan}} under a {{gmsla}} or an {{osla}} where there is a settlement failure without actually closing out the whole agreement. It is also a useful tool in getting optimal netting analysis in [[gross jurisdiction]]s, but that is not what the clause was inserted to do.
 In a nutshell (and more detail can be found at [[GMSLA netting]] the idea is to call each loan (under a {{gmslaprov|Borrower}} or {{gmslaprov|Lender}}'s general right to do so under Paragraph {{gmslaprov|8}}) before designating an {{gmslaprov|Event of Default}} under Paragraph {{gmslaprov|10}} and effecting close out under paragraph {{gmslaprov|11}}. Note some deft manouevring is required to get mini-closeout to work where you have term {{gmslaprov|Loans}} in your portfolio (that is, {{gmslaprov|Loans}} which are not callable at will under paragraph {{gmslaprov|8}}) or where [[automatic early termination]] applies.
 {{gmslaanatomy}}