Template:Nutshell 2002 ISDA Close-out Amount: Difference between revisions

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“'''{{isdaprov|Close-out Amount}}'''” means, the {{isdaprov|Expenses}} the {{isdaprov|Determining Party}} would incur (expressed as a positive) or gains it would realise (expressed as a negative) in replacing, (a) the material terms of that {{isdaprov|Terminated Transaction}}, and (b) the option rights of the parties in respect of that {{isdaprov|Terminated Transaction}}. <br>
“'''{{isdaprov|Close-out Amount}}'''” means the losses the {{isdaprov|Determining Party}} would incur (positive) or gains it would realise (negative) in replacing the material terms and the option rights of the parties under a {{isdaprov|Terminated Transaction}}, determined as of the {{isdaprov|Early Termination Date}} (or, if that would not be [[commercially reasonable]], such dates following that date as would be [[commercially reasonable]]) in {{tag|good faith}} and in a {{tag|commercially reasonable}} manner. The {{isdaprov|Determining Party}} may determine {{isdaprov|Close-out Amount}}s for groups of {{isdaprov|Terminated Transactions}} as long as all {{isdaprov|Terminated Transactions}} are accounted for. <br>
 
{{isdaprov|Unpaid Amounts}} and {{isdaprov|Expenses}} in respect of {{isdaprov|Terminated Transaction}}s are '''excluded'''  from the {{isdaprov|Close-out Amount}} calculation. <br>
Any {{isdaprov|Close-out Amount}} will be determined by the {{isdaprov|Determining Party}} in {{tag|good faith}} and using {{tag|commercially reasonable}} procedures to produce a commercially reasonable result. <br>
The {{isdaprov|Determining Party}} may consider any of the following (unless it thinks they aren’t available or would produce an unconscionable result): <br>
 
:(i) quotations for replacement transactions that factor in the {{isdaprov|Determining Party}}’s creditworthiness and the ISDA terms between the {{isdaprov|Determining Party}} and the quoting party; <br>  
The {{isdaprov|Determining Party}} may determine a {{isdaprov|Close-out Amount}} for any group of {{isdaprov|Terminated Transactions}} but, in the aggregate, for not less than all {{isdaprov|Terminated Transactions}}. Each {{isdaprov|Close-out Amount}} will be determined as of the {{isdaprov|Early Termination Date}} or such later date as would be commercially reasonable. <br>
:(ii) third party market data; or <br>
 
:(iii) internal quotes or market data if used by the {{isdaprov|Determining Party}} in the regular course to value similar transactions. <br>
{{isdaprov|Unpaid Amounts}} in respect of a {{isdaprov|Terminated Transaction}} and Expenses are to be excluded in all determinations of {{isdaprov|Close-out Amount}}s. <br>
 
In determining a {{isdaprov|Close-out Amount}}, the {{isdaprov|Determining Party}} may consider any relevant information, including, without limitation: <br>
(i) quotations for replacement transactions supplied by third parties that may take into account the {{isdaprov|Determining Party}}'s creditworthiness and the terms of any documentation, between the {{isdaprov|Determining Party}} and the third party; <br>  
(ii) relevant market data supplied by one or more third parties; or <br>
(iii) information as described above from internal sources if it is of the same type used by the Determining Party in the regular course of its business for the valuation of similar transactions. <br>
unless the Determining Party reasonably believes that they are not readily available or would produce a result that would not satisfy the standards and procedures described in this definition. <br>

Latest revision as of 13:16, 3 November 2021

“Close-out Amount” means the losses the Determining Party would incur (positive) or gains it would realise (negative) in replacing the material terms and the option rights of the parties under a Terminated Transaction, determined as of the Early Termination Date (or, if that would not be commercially reasonable, such dates following that date as would be commercially reasonable) in good faith and in a commercially reasonable manner. The Determining Party may determine Close-out Amounts for groups of Terminated Transactions as long as all Terminated Transactions are accounted for.
Unpaid Amounts and Expenses in respect of Terminated Transactions are excluded from the Close-out Amount calculation.
The Determining Party may consider any of the following (unless it thinks they aren’t available or would produce an unconscionable result):

(i) quotations for replacement transactions that factor in the Determining Party’s creditworthiness and the ISDA terms between the Determining Party and the quoting party;
(ii) third party market data; or
(iii) internal quotes or market data if used by the Determining Party in the regular course to value similar transactions.
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