ISDA has prepared this
brief summary of frequently asked questions to assist in your consideration
of the 2008 Quebecor CDS Protocol (the “Quebecor Protocol”).
THIS FREQUENTLY ASKED QUESTIONS DOES
NOT PURPORT TO BE AND SHOULD NOT BE CONSIDERED A GUIDE TO OR AN EXPLANATION
OF ALL RELEVANT ISSUES OR CONSIDERATIONS IN CONNECTION WITH THE QUEBECOR
PROTOCOL. PARTIES SHOULD CONSULT WITH THEIR LEGAL ADVISERS AND ANY OTHER
ADVISER THEY DEEM APPROPRIATE PRIOR TO USING OR ADHERING TO THE QUEBECOR
PROTOCOL. ISDA ASSUMES NO RESPONSIBILITY FOR ANY USE TO WHICH ANY OF ITS
DOCUMENTATION OR OTHER DOCUMENTATION MAY BE PUT.
This Frequently Asked Questions webpage
is divided into three sections: (i) questions relating to the submission
of Adherence Letters; (ii) questions relating to the election of an entity
not to participate in the Quebecor Protocol; and (iii) questions relating
to the substance of the Quebecor Protocol itself.
Adherence Letter Submission
When do I need to send in my Adherence Letter?
The Quebecor Protocol is open between 9:00 a.m. New York Time on Wednesday,
January 30, 2008 and 5:00 p.m. New York Time on Friday, February 8, 2008.
Any entity must email its Adherence Letter to ISDA by 5:00 p.m. New York
Time on Friday, February 8, 2008, or it will not be able to participate
in the Quebecor Protocol.
How do I send in my Adherence Letter?
All Adherence Letters must be delivered by email to QuebecorProtocol@isda.org.
In the email, you must submit both your conformed and
executed copies of the Adherence Letter.
The Adherence Letter(s) should be on your
institution’s letterhead. Nothing in the form Adherence Letter available
on ISDA’s website may be changed with the exception of completing
the details of your institutional name, date and signature block.
You are not required to send your original
Adherence Letter(s) by mail to ISDA.
What is a conformed copy?
A conformed copy of the Adherence Letter means that the name of the authorized
signatory (for example, Patricia Smith) is typed rather than having Patricia
Smith’s actual signature on the letter. ISDA only posts on its website
the conformed copy of all Adherence Letters.
You must also submit an executed, or signed,
copy of the Adherence Letter in addition to the conformed copy of the
Adherence Letter. ISDA keeps the executed copy of the Adherence Letter
for its files and does not share the executed copy with anyone else.
Who is an authorized signatory?
An authorized signatory to the Adherence Letter is an individual who has
the legal authority to bind the adhering institution.
What if I am an investment or asset manager
– how do I complete the signature block?
If you are an investment or asset manager and act on behalf of multiple
funds, you may indicate the following in the signature block: “Investment/Asset
Manager, acting on behalf of the funds and accounts listed in the relevant
Master Agreement between it and another Adhering Party”. A separate
Adherence Letter for each fund or account does not need to be submitted
to ISDA. Further, no specific names of clients of the investment/asset
manager will be publicly disclosed on the ISDA website in connection with
the Quebecor Protocol.
However, in order for Physical Settlement
Requests to be calculated by Participating Bidders, each such investment/asset
manager is required to provide a list of all funds and accounts that it
acts on behalf of to each Participating Bidder that has (or whose affiliate
has) entered into a Master Agreement with any of those funds or accounts.
As provided in paragraph (1) of the Auction Methodology set out in [Exhibit
3 of the Quebecor Protocol], on the Business Day prior to the Auction
Date, the Administrators (Markit and Creditex) will publish a list of
the Participating Bidders on their respective websites. In addition, contact
details will be available for the Participating Bidders through their
Adherence Letters on the ISDA website.
Can I change the text of the Adherence
No. The Adherence Letter must be in the same format as the
form letter published in the 2008 Quebecor CDS Protocol.
You may obtain a copy of the form Adherence Letter by visiting the ISDA
and clicking on “2008 Quebecor CDS Protocol” and then clicking
on “Form of Adherence Letter”.
Does it cost any money to adhere to the
Entities Electing Not to Adhere
to the Quebecor Protocol
What happens if my institution or fund does not adhere to the Quebecor
If your institution or fund elects not to participate in the Quebecor
Protocol, then you must bilaterally settle each of your trade(s) with
each of your counterparties as such trade(s) relate to Quebecor World
Inc. You will not be able to take advantage of the auction mechanic and
should contact your counterparty or counterparties immediately if you
do not plan to participate in the Quebecor Protocol.
Scope of Transaction Coverage
Relating to the Quebecor Protocol
Does adhering to the Quebecor Protocol affect my single name trades?
Yes. Single name trades will be part of the auction process provided for
by the Quebecor Protocol. Thus, single name trades on Quebecor World Inc.
will be subject to the procedures set forth in the Protocol.
Does adhering to the Quebecor Protocol
affect other credit derivative transactions?
Yes. In addition to single and index credit derivative transactions referencing
Quebecor, the following transactions are also covered in the Quebecor
Protocol: Constant Maturity Swap Transaction, a Principal Only Transaction,
an Interest Only Transaction, First to Default Transaction, Nth to Default
Transaction, Recovery Lock Transaction, Bespoke Portfolio Transaction,
Single-Name Swaption and Portfolio Swaption.
What credit derivative transactions are
not affected by adhering to the Quebecor Protocol?
Reference Obligation Only Transactions, Loan Only Transactions, Preferred
CDS Transactions and Fixed Recovery Transactions are not covered under
the Quebecor Protocol.
Who runs the auction?
The auction will be administered by Creditex and Markit and not by ISDA.
When is the auction?
The auction will take place on February 19, 2008. Details of the auction
results will be posted at www.creditfixings.com.
Cash Settlement Date and Accruals
When is the Cash Settlement Date?
The Cash Settlement Date is expected to be March 4, 2008.
How are accruals calculated?
There will not be a rebate of the Fixed Rate accrual on the Quebecor Portion.
The Seller will be required to deduct the accrued amount from the Cash
Settlement Amount payable on the Cash Settlement Date, expected to be
March 4, 2008. Accrued amounts will be calculated up to and including
January 22, 2008.