INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION
For Immediate Release Monday, October 28, 2002
For More Information, Please Contact:
Stacy Carey, ISDA New York, (212) 901-6000; Fax (212) 901-6001; firstname.lastname@example.org
ISDA PUBLISHES 2002
The Energy Bridge, which is based on the 2001 ISDA
Cross-Agreement Bridge, is intended to provide parties to the 1992 ISDA
Master Agreement with a means to achieve a form of cross-product netting.
Parties who have signed an ISDA Master Agreement will be able to use the
The 2002 ISDA Energy Agreement Bridge enables parties,
upon the occurrence of certain events under any one of a variety of industry-standard
agreements (including the ISDA Master Agreement), to terminate transactions
documented under each of those agreements and to incorporate the net
close-out amounts calculated in respect of transactions documented under
industry-standard agreements other than the ISDA Master Agreement within the
close-out provisions of their ISDA Master Agreement. "The
Using the Energy Bridge in an existing ISDA Master Agreement may offer parties significant advantages: it makes use of the ISDA Master Agreement's close-out netting provisions, which are supported by an extensive and well respected library of netting opinions; it may offer, in many jurisdictions, a more robust way of achieving a form of cross-product netting; and the Energy Bridge can be easily incorporated into a new ISDA Master Agreement or by way of a single amendment without the need to negotiate a separate agreement.
“ISDA has produced a streamlined document designed to
enable parties to margin trading exposures across transaction and product
types, said Steve Bunkin, Vice-President and
Associate General Counsel at Goldman Sachs & Co. and Co-Chair of ISDA’s North American Energy and Developing Products
The Energy Bridge keeps the agreements between the
parties essentially separate from each other, and simply places the close-out
mechanics of the ISDA Master Agreement between the parties "on top"
of the specified Bridged Agreements if a Bridging Event is triggered. It is also expected that, in most
jurisdictions, this approach will minimize the insolvency, regulatory and tax
implications of using the
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 590 member institutions from 46 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.