overview of the isda credit support documentation and brazilian collateral issues hotel...
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Overview of the ISDA Credit Support Overview of the ISDA Credit Support Documentation and Brazilian Collateral Issues Documentation and Brazilian Collateral Issues
Hotel Inter-Continental Hotel Inter-Continental Sao Paulo, BrazilSao Paulo, Brazil
August 6, 2002August 6, 2002
Overview of the ISDA Credit Support Overview of the ISDA Credit Support Documentation and Brazilian Collateral Issues Documentation and Brazilian Collateral Issues
Hotel Inter-Continental Hotel Inter-Continental Sao Paulo, BrazilSao Paulo, Brazil
August 6, 2002August 6, 2002
Robert G. PickelExecutive Director and Chief Executive Officer
ISDA
Robert G. PickelExecutive Director and Chief Executive Officer
ISDA
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Basics of CollateralizationBasics of CollateralizationBasics of CollateralizationBasics of Collateralization
Risk ReductionRisk Reduction Market and Regulatory ForcesMarket and Regulatory Forces Disadvantages of Other Methods - Guarantees, Disadvantages of Other Methods - Guarantees,
Credit Insurance or Bond, Letter of Credit, Triple-A Credit Insurance or Bond, Letter of Credit, Triple-A SubsSubs
DrawbacksDrawbacks Operational systems and legal supportOperational systems and legal support Costs of collateral and support may be significantCosts of collateral and support may be significant Legal risk : applicable law and procedures may Legal risk : applicable law and procedures may
vary from jurisdiction to jurisdictionvary from jurisdiction to jurisdiction
Risk ReductionRisk Reduction Market and Regulatory ForcesMarket and Regulatory Forces Disadvantages of Other Methods - Guarantees, Disadvantages of Other Methods - Guarantees,
Credit Insurance or Bond, Letter of Credit, Triple-A Credit Insurance or Bond, Letter of Credit, Triple-A SubsSubs
DrawbacksDrawbacks Operational systems and legal supportOperational systems and legal support Costs of collateral and support may be significantCosts of collateral and support may be significant Legal risk : applicable law and procedures may Legal risk : applicable law and procedures may
vary from jurisdiction to jurisdictionvary from jurisdiction to jurisdiction
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ISDA Credit Support ISDA Credit Support Documents -- Documents --
A Time of ChangeA Time of Change
ISDA Credit Support ISDA Credit Support Documents -- Documents --
A Time of ChangeA Time of Change Lessons of 1997-1998Lessons of 1997-1998
Reduce time framesReduce time frames Revise dispute resolution processRevise dispute resolution process Broaden the role of ISDA documentsBroaden the role of ISDA documents
Opportunity to make structural changesOpportunity to make structural changes Simplify architectureSimplify architecture Reduce size of documentReduce size of document
Result: 2001 ISDA Margin Provisions and forms of Result: 2001 ISDA Margin Provisions and forms of Amendment to existing credit support documentsAmendment to existing credit support documents
Lessons of 1997-1998Lessons of 1997-1998 Reduce time framesReduce time frames Revise dispute resolution processRevise dispute resolution process Broaden the role of ISDA documentsBroaden the role of ISDA documents
Opportunity to make structural changesOpportunity to make structural changes Simplify architectureSimplify architecture Reduce size of documentReduce size of document
Result: 2001 ISDA Margin Provisions and forms of Result: 2001 ISDA Margin Provisions and forms of Amendment to existing credit support documentsAmendment to existing credit support documents
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Background and Structure of Background and Structure of 1994 ISDA Credit Support 1994 ISDA Credit Support
Annex (NY Law)Annex (NY Law)
Background and Structure of Background and Structure of 1994 ISDA Credit Support 1994 ISDA Credit Support
Annex (NY Law)Annex (NY Law) Bilateral, mark-to-market formBilateral, mark-to-market form Cash and securities posted as collateralCash and securities posted as collateral Parties can add other forms of credit supportParties can add other forms of credit support Computation and delivery, substitution and return mechanicsComputation and delivery, substitution and return mechanics Annex also covers:Annex also covers:
Dispute resolutionDispute resolution Holding and using collateral; DistributionsHolding and using collateral; Distributions Events of Default; Rights and RemediesEvents of Default; Rights and Remedies Representations; ExpensesRepresentations; Expenses
Bilateral, mark-to-market formBilateral, mark-to-market form Cash and securities posted as collateralCash and securities posted as collateral Parties can add other forms of credit supportParties can add other forms of credit support Computation and delivery, substitution and return mechanicsComputation and delivery, substitution and return mechanics Annex also covers:Annex also covers:
Dispute resolutionDispute resolution Holding and using collateral; DistributionsHolding and using collateral; Distributions Events of Default; Rights and RemediesEvents of Default; Rights and Remedies Representations; ExpensesRepresentations; Expenses
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Background and StructureBackground and StructureBackground and StructureBackground and Structure
Part of Schedule to ISDA MasterPart of Schedule to ISDA Master
Underlying assumption that NY law Underlying assumption that NY law applies; NY law ISDA Masterapplies; NY law ISDA Master
Paragraph 13 of ISDA Credit Support Paragraph 13 of ISDA Credit Support Annex is equivalent of the Schedule to Annex is equivalent of the Schedule to the ISDA Master Agreementthe ISDA Master Agreement
Part of Schedule to ISDA MasterPart of Schedule to ISDA Master
Underlying assumption that NY law Underlying assumption that NY law applies; NY law ISDA Masterapplies; NY law ISDA Master
Paragraph 13 of ISDA Credit Support Paragraph 13 of ISDA Credit Support Annex is equivalent of the Schedule to Annex is equivalent of the Schedule to the ISDA Master Agreementthe ISDA Master Agreement
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ISDA Agreement Structure ISDA Agreement Structure 20022002
ISDA Agreement Structure ISDA Agreement Structure 20022002
1992 Master Agreement (Multicurrency-Cross Border)
Governs the legal and credit relationship of the parties
Includes representations, events of default/termination events and covenants
Incorporates Confirmations Schedule used to make changes to
standard provisions
Confirmations (short form)
Incorporate Definitions Specify economic terms of each
transaction Include Transaction-specific
modifications
Credit Support Documents: Offering protection against credit risk
2001 ISDA Margin Supplement (incorporating 2001 ISDA Margin Provisions)
• 1995 Credit Support Annex (Transfer – English Law)
• 1994 Credit Support Annex
(New York Law)
1995 Credit Support Deed (Security Interest – English Law)
1996 Credit Support Annex
(Japanese Law)
Protocols: amending Master Agreement
• 2001 Euro Protocol
• 2000 EMU Protocol (Greece)
• 1998 EMU Protocol
Confirmations (long form) Definitions: for use in documenting Transactions
2000 Definitions (replace the 1991 Definitions (as amended by the 1998 Supplement)
1999 Credit Derivatives Definitions (plus three Supplements published in 2001)
1998 Euro Definitions
1998 FX and Currency Option Definitions (plus revised
Annex A)
1997 Bullion Definitions
1997 Government Bond Option Definitions
1996 Equity Derivatives Definitions
1993 Commodity Derivatives Definitions (as amended by the 2000 Supplement)
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Paragraph 1Paragraph 1Paragraph 1Paragraph 1
InterpretationInterpretation
(a)(a) Definitions and InconsistencyDefinitions and Inconsistency
(b)(b) Secured Party and PledgorSecured Party and Pledgor
InterpretationInterpretation
(a)(a) Definitions and InconsistencyDefinitions and Inconsistency
(b)(b) Secured Party and PledgorSecured Party and Pledgor
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Paragraph 2Paragraph 2Paragraph 2Paragraph 2
Security InterestSecurity Interest
Grant by Pledgor of first priority Grant by Pledgor of first priority security interest thereon and right of security interest thereon and right of set-offset-off
Immediate release of security interest Immediate release of security interest and lien upon Transfer of Posted and lien upon Transfer of Posted Collateral to PledgorCollateral to Pledgor
Security InterestSecurity Interest
Grant by Pledgor of first priority Grant by Pledgor of first priority security interest thereon and right of security interest thereon and right of set-offset-off
Immediate release of security interest Immediate release of security interest and lien upon Transfer of Posted and lien upon Transfer of Posted Collateral to PledgorCollateral to Pledgor
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Credit Support Obligations Credit Support Obligations Worksheets and ExamplesWorksheets and ExamplesCredit Support Obligations Credit Support Obligations Worksheets and ExamplesWorksheets and Examples
Identify all relevant defined terms (assigned vs. Identify all relevant defined terms (assigned vs. calculated);calculated);
Establish numerical inputs for all “assigned” Establish numerical inputs for all “assigned” defined terms; anddefined terms; and
Do the arithmetic to derive all “calculated” defined Do the arithmetic to derive all “calculated” defined terms.terms.
Identify all relevant defined terms (assigned vs. Identify all relevant defined terms (assigned vs. calculated);calculated);
Establish numerical inputs for all “assigned” Establish numerical inputs for all “assigned” defined terms; anddefined terms; and
Do the arithmetic to derive all “calculated” defined Do the arithmetic to derive all “calculated” defined terms.terms.
The following worksheets and examples demonstrate the mechanics used in Paragraph 3 of the ISDA Credit Support Annex to calculate Credit Support Obligations (including Delivery Amounts and Return Amounts), based on the following three steps:
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Delivery Amount Delivery Amount WorksheetWorksheet
Delivery Amount Delivery Amount WorksheetWorksheet
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. [ ] B. n/a
2. Independent Amount A. [ ] B. [ ]
3. Threshold A. n/a B. [ ]
4. Min. Transfer Amount A. n/a B. [ ]
5. Value of Posted Credit A. [ ] B. n/aSupport
“Calculated” Defined Terms Secured Party Pledgor (Party B)(Party A)
6. Credit Support Amount A. n/a B. 1A + 2B - 2A - 3B
7. Delivery Amount A. n/a B. 6B - 5A, iff 7B (4B)
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Delivery Amount Delivery Amount WorksheetWorksheetExample 1Example 1
Delivery Amount Delivery Amount WorksheetWorksheetExample 1Example 1
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. 500 B. n/a
2. Independent Amount A. 0 B. 250
3. Threshold A. n/a B. 100
4. Min. Transfer Amount A. n/a B. 50
5. Value of Posted Credit A. 250 B. n/aSupport
“Calculated” Defined Terms Secured Party Pledgor (Party B)(Party A)
6. Credit Support Amount A. n/a B. 500 + 250 - 0 - 100 = 650
7. Delivery Amount A. n/a B. 650 - 250 (iff (50)) = 400
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Delivery Amount Delivery Amount WorksheetWorksheetExample 2Example 2
Delivery Amount Delivery Amount WorksheetWorksheetExample 2Example 2
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. 500 B. n/a2. Independent Amount A. 700 B. 3003. Threshold A. n/a B. 2004. Min. Transfer Amount A. n/a B. 505. Value of Posted Credit A. 300 B. n/a
Support“Calculated” Defined Terms Secured Party Pledgor (Party B)
(Party A) 6. Credit Support Amount A. n/a B. 500+300 - 700 - 200
= (100) = 0
7. Delivery Amount A. n/a B. 0
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Return Amount WorksheetReturn Amount WorksheetReturn Amount WorksheetReturn Amount Worksheet
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. [ ] B. n/a2. Independent Amount A. [ ] B. [ ]3. Threshold A. n/a B. [ ]4. Min. Transfer Amount A. [ ] B. n/a5. Value of Posted Credit A. [ ] B. n/a
Support“Calculated” Defined Terms Secured Party Pledgor (Party B)
(Party A) 6. Credit Support Amount A. n/a B. 1A + 2B - 2A - 3B7. Return Amount A. 5A - 6B iff B. n/a
7A (4A)
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Return Amount WorksheetReturn Amount WorksheetExample 1Example 1
Return Amount WorksheetReturn Amount WorksheetExample 1Example 1
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. 500 B. n/a
2. Independent Amount A. 0 B. 300
3. Threshold A. n/a B. 600
4. Min. Transfer Amount A. 50 B. n/a
5. Value of Posted Credit A. 300 B. n/aSupport
“Calculated” Defined Terms Secured Party Pledgor (Party B)(Party A)
6. Credit Support Amount A. n/a B. 500 + 300 - 0 - 600 = 200
7. Return Amount A. 300 - 200 B. n/a (iff (50))=100
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Return Amount WorksheetReturn Amount WorksheetExample 2Example 2
Return Amount WorksheetReturn Amount WorksheetExample 2Example 2
“Assigned” Defined Terms Secured Party Pledgor (Party B)(Party A)
1. Exposure A. 500 B. n/a2. Independent Amount A. 700 B. 3003. Threshold A. n/a B. 2004. Min. Transfer Amount A. 50 B. n/a5. Value of Posted Credit A. 300 B. n/a
Support“Calculated” Defined Terms Secured Party Pledgor (Party B)
(Party A) 6. Credit Support Amount A. n/a B. 500+300 - 700 - 200
= (100)= 0
7. Return Amount A. 300 - 0 (iff B. n/a(50)) = 300
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Paragraph 4Paragraph 4Paragraph 4Paragraph 4
(a)(a) Conditions Precedent - no Event of Default, Conditions Precedent - no Event of Default, Potential Event of Default or Specified Potential Event of Default or Specified Condition/no Early Termination DateCondition/no Early Termination Date
(b)(b) Transfers - next Local Business Day after demandTransfers - next Local Business Day after demand
(c)(c) Calculations - by Valuation Agent as of the Calculations - by Valuation Agent as of the Valuation Time for each Valuation DateValuation Time for each Valuation Date
(d)(d) Substitutions - permitted unless otherwise Substitutions - permitted unless otherwise specifiedspecified
(a)(a) Conditions Precedent - no Event of Default, Conditions Precedent - no Event of Default, Potential Event of Default or Specified Potential Event of Default or Specified Condition/no Early Termination DateCondition/no Early Termination Date
(b)(b) Transfers - next Local Business Day after demandTransfers - next Local Business Day after demand
(c)(c) Calculations - by Valuation Agent as of the Calculations - by Valuation Agent as of the Valuation Time for each Valuation DateValuation Time for each Valuation Date
(d)(d) Substitutions - permitted unless otherwise Substitutions - permitted unless otherwise specifiedspecified
Conditions Precedent, Transfers, Conditions Precedent, Transfers, Calculations and SubstitutionsCalculations and Substitutions
Conditions Precedent, Transfers, Conditions Precedent, Transfers, Calculations and SubstitutionsCalculations and Substitutions
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Paragraph 5Paragraph 5Paragraph 5Paragraph 5
Dispute ResolutionDispute Resolution Notify other party and Valuation AgentNotify other party and Valuation Agent Undisputed amount is transferredUndisputed amount is transferred Parties consultParties consult If dispute relates to Exposure, obtain If dispute relates to Exposure, obtain
Market QuotationsMarket Quotations If dispute relates to Value of Credit If dispute relates to Value of Credit
Support, resolve in manner stipulated in Support, resolve in manner stipulated in Paragraph 13Paragraph 13
Dispute ResolutionDispute Resolution Notify other party and Valuation AgentNotify other party and Valuation Agent Undisputed amount is transferredUndisputed amount is transferred Parties consultParties consult If dispute relates to Exposure, obtain If dispute relates to Exposure, obtain
Market QuotationsMarket Quotations If dispute relates to Value of Credit If dispute relates to Value of Credit
Support, resolve in manner stipulated in Support, resolve in manner stipulated in Paragraph 13Paragraph 13
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Paragraph 6Paragraph 6Paragraph 6Paragraph 6
Holding and Using Posted Holding and Using Posted CollateralCollateral
Holding and Using Posted Holding and Using Posted CollateralCollateral
(a)(a) Care of Posted CollateralCare of Posted Collateral
(b)(b) Eligibility to Hold Posted Collateral; CustodiansEligibility to Hold Posted Collateral; Custodians
(c)(c) Use of Posted Collateral - Broadly PermittedUse of Posted Collateral - Broadly Permitted
(d)(d) Distributions and Interest AmountDistributions and Interest Amount
(a)(a) Care of Posted CollateralCare of Posted Collateral
(b)(b) Eligibility to Hold Posted Collateral; CustodiansEligibility to Hold Posted Collateral; Custodians
(c)(c) Use of Posted Collateral - Broadly PermittedUse of Posted Collateral - Broadly Permitted
(d)(d) Distributions and Interest AmountDistributions and Interest Amount
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Paragraph 7Paragraph 7Paragraph 7Paragraph 7
Failure to post/return collateral or to pay Failure to post/return collateral or to pay distributions or interest when due for 2 Local distributions or interest when due for 2 Local Business Days after noticeBusiness Days after notice
Failure to comply with provisions regarding Failure to comply with provisions regarding use of collateral for 5 Local Business Days use of collateral for 5 Local Business Days after noticeafter notice
Failure to perform any other agreement or Failure to perform any other agreement or obligation under Annex for 30 days after obligation under Annex for 30 days after noticenotice
Failure to post/return collateral or to pay Failure to post/return collateral or to pay distributions or interest when due for 2 Local distributions or interest when due for 2 Local Business Days after noticeBusiness Days after notice
Failure to comply with provisions regarding Failure to comply with provisions regarding use of collateral for 5 Local Business Days use of collateral for 5 Local Business Days after noticeafter notice
Failure to perform any other agreement or Failure to perform any other agreement or obligation under Annex for 30 days after obligation under Annex for 30 days after noticenotice
Events of DefaultEvents of Default
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Paragraph 8(a)Paragraph 8(a)Paragraph 8(a)Paragraph 8(a)Secured Party’s Rights and Secured Party’s Rights and
RemediesRemedies Triggered by:Triggered by:
(1)(1) Occurrence of Event of Default or Specified Occurrence of Event of Default or Specified Condition with respect to Pledgor; orCondition with respect to Pledgor; or
(2)(2) Occurrence/Designation of Early Termination DateOccurrence/Designation of Early Termination Date
Exercise of Rights and RemediesExercise of Rights and Remedies
(i)(i) rights available under applicable law (NY UCC)rights available under applicable law (NY UCC)
(ii)(ii) rights under terms of Other Posted Supportrights under terms of Other Posted Support
(iii)(iii) right to set offright to set off
(iv)(iv) right to liquidate Posted Collateralright to liquidate Posted Collateral
Secured Party’s Rights and Secured Party’s Rights and RemediesRemedies
Triggered by:Triggered by:
(1)(1) Occurrence of Event of Default or Specified Occurrence of Event of Default or Specified Condition with respect to Pledgor; orCondition with respect to Pledgor; or
(2)(2) Occurrence/Designation of Early Termination DateOccurrence/Designation of Early Termination Date
Exercise of Rights and RemediesExercise of Rights and Remedies
(i)(i) rights available under applicable law (NY UCC)rights available under applicable law (NY UCC)
(ii)(ii) rights under terms of Other Posted Supportrights under terms of Other Posted Support
(iii)(iii) right to set offright to set off
(iv)(iv) right to liquidate Posted Collateralright to liquidate Posted Collateral
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Paragraph 8(b)Paragraph 8(b)Paragraph 8(b)Paragraph 8(b)Pledgor’s Rights and RemediesPledgor’s Rights and Remedies
Triggered by Occurrence/Designation of Early Termination Date as Triggered by Occurrence/Designation of Early Termination Date as a result of an Event of Default or Specified Condition with respect a result of an Event of Default or Specified Condition with respect to Secured Partyto Secured Party
Exercise of Rights and RemediesExercise of Rights and Remedies
(i)(i) rights available under applicable lawrights available under applicable law
(ii)(ii) rights under terms of Other Posted Supportrights under terms of Other Posted Support
(iii)(iii) Secured Party obligated to Transfer all Posted Secured Party obligated to Transfer all Posted Collateral and the Interest AmountCollateral and the Interest Amount
(iv)(iv) right to set off or withhold payment of remaining right to set off or withhold payment of remaining amountsamounts
Pledgor’s Rights and RemediesPledgor’s Rights and Remedies Triggered by Occurrence/Designation of Early Termination Date as Triggered by Occurrence/Designation of Early Termination Date as
a result of an Event of Default or Specified Condition with respect a result of an Event of Default or Specified Condition with respect to Secured Partyto Secured Party
Exercise of Rights and RemediesExercise of Rights and Remedies
(i)(i) rights available under applicable lawrights available under applicable law
(ii)(ii) rights under terms of Other Posted Supportrights under terms of Other Posted Support
(iii)(iii) Secured Party obligated to Transfer all Posted Secured Party obligated to Transfer all Posted Collateral and the Interest AmountCollateral and the Interest Amount
(iv)(iv) right to set off or withhold payment of remaining right to set off or withhold payment of remaining amountsamounts
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Paragraphs 8(c)/(d) Paragraphs 8(c)/(d) Paragraphs 8(c)/(d) Paragraphs 8(c)/(d)
Rights and RemediesRights and Remedies
Deficiencies and Excess ProceedsDeficiencies and Excess Proceeds Final ReturnsFinal Returns
Rights and RemediesRights and Remedies
Deficiencies and Excess ProceedsDeficiencies and Excess Proceeds Final ReturnsFinal Returns
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Paragraph 9Paragraph 9Paragraph 9Paragraph 9
RepresentationsRepresentations Power to grant a security interestPower to grant a security interest Sole owner of or right to transfer Eligible CollateralSole owner of or right to transfer Eligible Collateral Creation of a valid and perfected first priority Creation of a valid and perfected first priority
security interestsecurity interest No other security interest on any Posted CollateralNo other security interest on any Posted Collateral Special Representation for U.S. bank or thrift - Special Representation for U.S. bank or thrift -
Appendix F to User’s GuideAppendix F to User’s Guide
RepresentationsRepresentations Power to grant a security interestPower to grant a security interest Sole owner of or right to transfer Eligible CollateralSole owner of or right to transfer Eligible Collateral Creation of a valid and perfected first priority Creation of a valid and perfected first priority
security interestsecurity interest No other security interest on any Posted CollateralNo other security interest on any Posted Collateral Special Representation for U.S. bank or thrift - Special Representation for U.S. bank or thrift -
Appendix F to User’s GuideAppendix F to User’s Guide
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Paragraph 10Paragraph 10Paragraph 10Paragraph 10
ExpensesExpenses Each party pays its own when performing its Each party pays its own when performing its
contractual obligationscontractual obligations Because the Pledgor remains the “owner” of Because the Pledgor remains the “owner” of
collateral, continues to be liable to pay taxes and collateral, continues to be liable to pay taxes and other charges that may be levied on collateralother charges that may be levied on collateral
Costs incurred by Secured Party in liquidating and Costs incurred by Secured Party in liquidating and applying collateral are payable by the Defaulting applying collateral are payable by the Defaulting Party or (if no Defaulting Party) equally by both Party or (if no Defaulting Party) equally by both partiesparties
ExpensesExpenses Each party pays its own when performing its Each party pays its own when performing its
contractual obligationscontractual obligations Because the Pledgor remains the “owner” of Because the Pledgor remains the “owner” of
collateral, continues to be liable to pay taxes and collateral, continues to be liable to pay taxes and other charges that may be levied on collateralother charges that may be levied on collateral
Costs incurred by Secured Party in liquidating and Costs incurred by Secured Party in liquidating and applying collateral are payable by the Defaulting applying collateral are payable by the Defaulting Party or (if no Defaulting Party) equally by both Party or (if no Defaulting Party) equally by both partiesparties
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Paragraph 11Paragraph 11Paragraph 11Paragraph 11
Other ProvisionsOther Provisions(a)(a) Default Interest - applicable when Default Interest - applicable when Secured PartySecured Party
fails to make a timely transferfails to make a timely transfer
(b)(b) Further AssurancesFurther Assurances
(c)(c) Further Protections - Pledgor must safeguard all Further Protections - Pledgor must safeguard all Posted Credit SupportPosted Credit Support
(d)(d) Good Faith and Commercially Reasonable MannerGood Faith and Commercially Reasonable Manner
(e)(e) Demands and NoticesDemands and Notices
(f)(f) Specification of Certain Matters in ConfirmationsSpecification of Certain Matters in Confirmations
Other ProvisionsOther Provisions(a)(a) Default Interest - applicable when Default Interest - applicable when Secured PartySecured Party
fails to make a timely transferfails to make a timely transfer
(b)(b) Further AssurancesFurther Assurances
(c)(c) Further Protections - Pledgor must safeguard all Further Protections - Pledgor must safeguard all Posted Credit SupportPosted Credit Support
(d)(d) Good Faith and Commercially Reasonable MannerGood Faith and Commercially Reasonable Manner
(e)(e) Demands and NoticesDemands and Notices
(f)(f) Specification of Certain Matters in ConfirmationsSpecification of Certain Matters in Confirmations
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Paragraph 13Paragraph 13Paragraph 13Paragraph 13
Elections and VariablesElections and Variables Eligible Collateral/Valuation PercentagesEligible Collateral/Valuation Percentages ThresholdsThresholds Valuation and TimingValuation and Timing ““Specified Conditions”Specified Conditions” Dispute Resolution provisions where Value of Posted Dispute Resolution provisions where Value of Posted
Credit Support not agreedCredit Support not agreed Eligibility to hold Posted Collateral; CustodiansEligibility to hold Posted Collateral; Custodians
Elections and VariablesElections and Variables Eligible Collateral/Valuation PercentagesEligible Collateral/Valuation Percentages ThresholdsThresholds Valuation and TimingValuation and Timing ““Specified Conditions”Specified Conditions” Dispute Resolution provisions where Value of Posted Dispute Resolution provisions where Value of Posted
Credit Support not agreedCredit Support not agreed Eligibility to hold Posted Collateral; CustodiansEligibility to hold Posted Collateral; Custodians
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Paragraph 13Paragraph 13Paragraph 13Paragraph 13
Distributions and Interest Amount Distributions and Interest Amount Additional RepresentationsAdditional Representations Other Eligible Support and Other Other Eligible Support and Other
Posted SupportPosted Support Demands and NoticesDemands and Notices Other ProvisionsOther Provisions
Distributions and Interest Amount Distributions and Interest Amount Additional RepresentationsAdditional Representations Other Eligible Support and Other Other Eligible Support and Other
Posted SupportPosted Support Demands and NoticesDemands and Notices Other ProvisionsOther Provisions
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2001 ISDA Margin 2001 ISDA Margin ProvisionsProvisions
2001 ISDA Margin 2001 ISDA Margin ProvisionsProvisions
The New StructureThe New Structure Common operational provisions – Part 1Common operational provisions – Part 1 New York Law: pledge/security interest New York Law: pledge/security interest
approach – Part 2approach – Part 2 English Law: title transfer approach – Part 3English Law: title transfer approach – Part 3 Other jurisdictions – Part 4Other jurisdictions – Part 4 Definitions – Part 5Definitions – Part 5 Supplement and other Appendices (Forms of Supplement and other Appendices (Forms of
Notices)Notices)
The New StructureThe New Structure Common operational provisions – Part 1Common operational provisions – Part 1 New York Law: pledge/security interest New York Law: pledge/security interest
approach – Part 2approach – Part 2 English Law: title transfer approach – Part 3English Law: title transfer approach – Part 3 Other jurisdictions – Part 4Other jurisdictions – Part 4 Definitions – Part 5Definitions – Part 5 Supplement and other Appendices (Forms of Supplement and other Appendices (Forms of
Notices)Notices)
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Issues to ConsiderIssues to ConsiderIssues to ConsiderIssues to Consider
Nature and location of collateralNature and location of collateral Nature and location of counterpartyNature and location of counterparty Perfection issuesPerfection issues Tax issuesTax issues Recharacterization issuesRecharacterization issues Collateral Opinion ProjectsCollateral Opinion Projects
Nature and location of collateralNature and location of collateral Nature and location of counterpartyNature and location of counterparty Perfection issuesPerfection issues Tax issuesTax issues Recharacterization issuesRecharacterization issues Collateral Opinion ProjectsCollateral Opinion Projects
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ISDA Collateral Opinion ISDA Collateral Opinion ProjectsProjects
ISDA Collateral Opinion ISDA Collateral Opinion ProjectsProjects
ISDA is in the process of obtaining legal opinions relating to ISDA is in the process of obtaining legal opinions relating to creation and perfection of security interests under the New creation and perfection of security interests under the New York and English law collateral documents.York and English law collateral documents.
Opinions received from:Opinions received from:AustraliaAustralia EnglandEngland ItalyItaly SingaporeSingapore
AustriaAustria FinlandFinland JapanJapan South KoreaSouth KoreaBelgium Belgium FranceFrance LuxembourgLuxembourg SwedenSwedenBermudaBermuda GermanyGermany MalaysiaMalaysia SwitzerlandSwitzerlandCanadaCanada Hong KongHong Kong The NetherlandsThe Netherlands TaiwanTaiwanCayman IslandsCayman Islands IndonesiaIndonesia New ZealandNew ZealandThailandThailandDenmarkDenmark IrelandIreland PortugalPortugal U.S.A.U.S.A.
Awaiting final opinions from:Awaiting final opinions from:NorwayNorway South AfricaSouth Africa
Opinions commissioned for:Opinions commissioned for:British Virgin IslandsBritish Virgin Islands ScotlandScotland
ISDA is in the process of obtaining legal opinions relating to ISDA is in the process of obtaining legal opinions relating to creation and perfection of security interests under the New creation and perfection of security interests under the New York and English law collateral documents.York and English law collateral documents.
Opinions received from:Opinions received from:AustraliaAustralia EnglandEngland ItalyItaly SingaporeSingapore
AustriaAustria FinlandFinland JapanJapan South KoreaSouth KoreaBelgium Belgium FranceFrance LuxembourgLuxembourg SwedenSwedenBermudaBermuda GermanyGermany MalaysiaMalaysia SwitzerlandSwitzerlandCanadaCanada Hong KongHong Kong The NetherlandsThe Netherlands TaiwanTaiwanCayman IslandsCayman Islands IndonesiaIndonesia New ZealandNew ZealandThailandThailandDenmarkDenmark IrelandIreland PortugalPortugal U.S.A.U.S.A.
Awaiting final opinions from:Awaiting final opinions from:NorwayNorway South AfricaSouth Africa
Opinions commissioned for:Opinions commissioned for:British Virgin IslandsBritish Virgin Islands ScotlandScotland