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The {{isdaprov|Threshold Amount}} is usually defined as a cash amount or a percentage of shareholder funds, or both, in which case — [[Trick for young players|schoolboy error]] hazard alert — be careful to say whether it is the greater or lesser of the two. It should be big: like, life-threateningly big - because the consequences of triggering it are dire. Expect to see 2-3% of shareholder funds, or (for banks) sums in the order of hundreds of millions of dollars. For funds it could be a lot lower — like, ten million dollars — and, of course, will reflect [[NAV]] not shareholder funds. | The {{isdaprov|Threshold Amount}} is usually defined as a cash amount or a percentage of shareholder funds, or both, in which case — [[Trick for young players|schoolboy error]] hazard alert — be careful to say whether it is the greater or lesser of the two. It should be big: like, life-threateningly big - because the consequences of triggering it are dire. Expect to see 2-3% of shareholder funds, or (for banks) sums in the order of hundreds of millions of dollars. For funds it could be a lot lower — like, ten million dollars — and, of course, will reflect [[NAV]] not shareholder funds. | ||
==[[Cross acceleration]]== | ==[[Cross acceleration]]== | ||
There are those who think {{isdaprov|Cross Default}} is a bit gauche; a bit passe in these enlightened times of zero-threshold [[VM CSA]]s. Your correspondent is one of them; the author of that terrible [[FT book | There are those who think {{isdaprov|Cross Default}} is a bit gauche; a bit passe in these enlightened times of zero-threshold [[VM CSA]]s. Your correspondent is one of them; the author of that terrible [[FT book about derivatives]] is not. For heroic folk like the [[JC]] — assuming they can’t persuade their [[credit department]] to abandon the notion of {{isdaprov|Cross Default}} altogether — a day I swear is coming, even if it is not yet here — one can quickly convert a dangerous {{isdaprov|Cross Default}} clause into a less nocuous (but still ''fairly'' nocuous, and yet strangely pointless<ref>The word for this is “specious”.</ref>) [[cross acceleration]] clause — meaning your close-out right that is only available where the lender in question has ''actually'' [[accelerated]] its {{isdaprov|Specified Indebtedness}}, not just become able to accelerate it, with some fairly simple edits, which are discussed in tedious detail [[Cross Acceleration - ISDA Provision|here]]. | ||