Articles by author
The new 2021 ISDA Interest Rate Derivatives Definitions: the end of discretion?
The publication of the new 2021 ISDA Interest Rate Derivatives Definitions (2021 Definitions) marks the first comprehensive update of ISDA’s definitions booklet for interest rate products since the publication of the 2006 ISDA Definitions (2006 Definitions) in January 2007. It is a significant undertaking, making a very wide variety of changes to take account of, among other things, benchmark reform, the new regulatory environment for bank resolution, the introduction of collateral rules and central clearing. In addition, there will also be a new electronic ISDA user interface called MyLibrary which will be updated as changes are made to the definitions. This article analyses the changes to the cash settlement provisions.
1 SEP 2021The suspense ends: court says certain ISDA bankruptcy defaults can be cured
In 2012 the Court of Appeal ruled that the counterparties of Lehman Brothers International (Europe) (LBIE) who had transacted under ISDA Master Agreements could suspend payment to the administrators indefinitely for so long as the Event of Default occasioned by the appointment of the administrators was continuing. As it has become ever clearer that LBIE will one day exit administration as a going concern (on a solvent basis), the administrators have maintained that the Event of Default will cease to be continuing and the holdouts will have to pay up. In one of the first cases to be heard virtually at the start of the COVID-19 pandemic, the administrators were finally able to ask the court whether implementation of their proposals for ending the administration would mean that the Event of Default was no longer continuing. This autumn the court ruled for the administrators.1 In addition to discussing the meaning of “continuing”, the judgment pays particular attention to what constitutes a Bankruptcy Event of Default under the 1992 and 2002 ISDA Master Agreements. Within the analysis, key variables were the importance to be given to factors such as the impact of an event on the counterparty’s credit risk and the permanent effect of the event on creditors’ rights. The granular analysis will be relevant to users of the ISDA Master Agreements but also to users of other contracts with similar wording such as credit derivatives.
1 JAN 2023Collateralised Fund Obligations (CFOs): the technicolor dreamcoat of fund finance from a US and UK/EU perspective
In this article the authors examine the mechanics of Collateralised Fund Obligations (CFOs) including GP-side and LP-side considerations, disclosure vs confidentiality, rating agency considerations and risk retention analysis.
1 APR 2023
