Template:M summ 2002 ISDA Default Rate: Difference between revisions

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[[Default Rate - ISDA Provision|Default]] interest is one of those perennial things in finance and is generally a rate higher than the implied funding rate for the period and person in question. You might well ask — though one might, as the [[JC]] does, struggle heroically to not go there — whether an arbitrary loading on what ought to be a fair estimate of one’s actual carrying cost is not an unenforceable [[Penalty clause|penalty]], but hey, everyone does it.
[[Default Rate - ISDA Provision|Default]] interest is one of those perennial things in finance and is generally a rate higher than the implied funding rate for the period and person in question. You might well ask — though one might, as the [[JC]] does, struggle heroically to not go there — whether an arbitrary loading on what ought to be a fair estimate of one’s actual carrying cost is not an unenforceable [[Penalty clause|penalty]], but hey, everyone does it.
The {{isdaprov|Default Rate}} appears in two contexts: firstly, in the Applicable Close-out Rate, and secondly in Section 9(h)(i) to deal with the default rate payable after the payment or delivery failure giving rise to an {{isdaprov|Event of Default}}, but before an {{isdaprov|Early Termination Date}} is  finally designated: in theory at any rate, thanks to Section {{isdaprov|2(a)(iii)}} that period could be quite a long time — potentially indefinite, if you haven’t caved in to the need to seem like a reasonable guy and agreed a {{isdaprov|Condition End Date}} limitation.

Latest revision as of 15:45, 30 July 2023

Default interest is one of those perennial things in finance and is generally a rate higher than the implied funding rate for the period and person in question. You might well ask — though one might, as the JC does, struggle heroically to not go there — whether an arbitrary loading on what ought to be a fair estimate of one’s actual carrying cost is not an unenforceable penalty, but hey, everyone does it.

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