Credit Support Default Event
Credit Support Default Event. Failure of some Credit Support Agreement.
Per ISDA Master Agreement exmple, this may take one of the following forms (there may be others not in this example): - Failure to comply with some obligation under the Credit Support Agreement (after a suitable grace period has elapsed) - Expiration or Termination of Credit Support Agreement while it is still needed for the transactions it covers (i.e. not normal termination); - Disavowal or repudiation of the Credit Suport Agreement by one or other party to it. Note that these three all relate to the state of the Credit Support Agreement, and have the effect that the Credit Support Agreement is no longer in effect, during a time when there is some Transaction in play which was intended to be covered by that Agreement. ISDA original terms from Master Agreement example, in full: Credit Support Default. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document Definition Agreement: SR Draft. Details from ISDA above.
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