Template:M comp disc 2002 ISDA 5(a)(vi)

The 2002 ISDA updates the 1992 ISDA’s Cross Default so that if the combined amount outstanding under the two limbs of Cross Default exceed the Threshold Amount, then it will be an Event of Default. Normally, under the 1992 ISDA, Cross Default requires one or the other limbs to be satisfied — you can’t add them together. This was a bit of a snafu. The two limbs are:

• a default under a financial agreement that would allow a creditor to accelerate any indebtedness that party owes it;
• a failure to pay on the due date under such agreements after the expiry of a grace period.