Template:M summ 2002 ISDA 1: Difference between revisions

Much of this comes from the “goes without saying, but we’ll say it anyway” dept — which is a large department indeed, in the annals of modern legal practice. But not the {{isdaprov|Single Agreement}} part. That’s important — by some lights the main reason one even has an {{isdama}}: it is the Section which vouchsafes your [[close-out netting]] analysis: it purports to inextricably bind together all {{isdaprov|Transaction}}s under the {{isdama}} as part of a single, concerted, nettable whole. Should (God forbid) your counterparty have imploded, an unthinking administrator might think the three-year jet fuel swap you traded in July 2012 had nothing really to do with the six-month interest rate swap you put on in February last year, and the two should be treated as separate, unitary transactions. It might think this quite enthusiastically, if one of those transactions happens out-of-the-money to you, and the other one in-the-money. “Why, that’s dashed bad luck, old man! You have to pay me that out-of-the-money exposure<ref>Yes I know: Section {{isdaprov|2(a)(iii)}}. We’ll get to that. And, also, set off in some jurisdictions, which would also spike an administrator’s guns. But for now, let’s say.</ref> and while this dead parrot owes you on the other trade, the end of the creditors’ queue is that one you can see over there in the far distance, should you have a telescope on you.”