For Immediate Release Wednesday, February 8, 2006
For More Information, Please Contact:
Louise Marshall, ISDA New York, 212-901-6000, lmarshall@isda.org
ISDA Publishes Credit Event Timeline and Letter Agreement Relating to Notice Delivery Methods
NEW YORK, Wednesday, February 8, 2006 – The International Swaps and Derivatives Association (ISDA) today announced the publication of two documents to help market participants handle credit events: a Timeline to summarize certain key settlement procedures in the 2003 ISDA Credit Derivatives Definitions (the “Credit Derivatives Definitions”) and an optional Letter Agreement allowing parties to elect alternative delivery methods for notices.
The Timeline for the Physical Settlement of a Credit Derivative Transaction Following a Credit Event gives a summary of the sequence of certain settlement activities after a Credit Event. The Timeline is based on the basic provisions of the ISDA Credit Derivatives Definitions. It does not incorporate all provisions set forth in the Definitions, nor does it alter individual contracts, rather is designed to assist market participants by providing a short guide to basic settlement mechanics in those Definitions.
The Letter Agreement Relating to Notice Delivery Methods gives parties that enter into it the ability to bilaterally add alternative delivery methods, in addition to those set forth in the Credit Derivatives Definitions, to their contracts. It allows parties to elect delivery methods, such as e-mail or electronic messaging systems, for notices in relation to the occurrence of a credit event and the settlement of a transaction due to a credit event.
These documents were developed by ISDA’s Credit Events Working Group, which is part of the Association’s Credit Derivatives Market Practice Committee.
ISDA is the global trade association representing leading participants in the privately negotiated derivatives industry. ISDA was chartered in 1985, and today has more than 675 member institutions from 50 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.