Specified Entity - ISDA Provision
Overview
Same concept in both versions of the ISDA Master Agreement only with different clause numberings. Specified Entity is relevant to:
And of course the Absence of Litigation representation. Let’s not forget that.
Each party designates its Specified Entities for each of these events in Part 1(a) of the Schedule, which gives the Schedule its familiar layout:
|
(a) “Specified Entity” means in relation to Party A for the purpose of:―
and in relation to Party B for the purpose of:― |
Summary
Specified Entity is so (~ cough ~) important that it is literally the first thing you see when you regard an ISDA Schedule.
Painstakingly set out, separately for Events of Default (namely DUST (Section 5(a)(v)), Cross Default (Section 5(a)(vi)) and Bankruptcy (Section 5(a)(vii)) and the one Termination Event (Credit Event Upon Merger (Section 5(b)(v) — as if you would want different Affiliates to trigger this event depending on precisely how they cork-screwed into the side of a hill), and jointly for the “Absence of Litigation” representation in Section 3(c) of the 2002 ISDA.
A Specified Entity is any affiliate (or, in theory at any rate, even a non-affiliate, if your risk officer is a total cretin) of a counterparty to an ISDA Master Agreement which is designated in the relevant Schedule.
It is relevant to the definition of Cross Default and Default under Specified Transaction in that it widens the effect of those provisions to include defaults by the parties specified.
Premium content
Here the free bit runs out. Subscribers click 👉 here. New readers sign up 👉 here and, for ½ a weekly 🍺 go full ninja about all these juicy topics 👇
|
- The JC’s famous Nutshell™ summary of this clause
See also
- Specified Transaction
- Default under Specified Transaction
- Cross Default
- Bankruptcy
- Absence of Litigation