For Immediate Release Tuesday,
November 27, 2001
For More Information, Please Contact:
Stacy Carey, ISDA New York, (212) 332-1200; Fax (212) 332-1212; scarey@isda.org
ISDA PUBLISHES SUPPLEMENT ON SUCCESSOR AND CREDIT
EVENTS FOR CREDIT DERIVATIVES
· Successor to a Reference Entity in the event of a merger, consolidation or transfer: the Supplement revises the definition of Successor by replacing the “all or substantially all” language in the Definitions with a numerical threshold that states that if an entity succeeds to 75 percent or more of the Bonds and Loans of the original Reference Entity, then the sole successor would be that entity. The Supplement outlines alternative approaches in the event that the 75 percent threshold test is not met
· Occurrence of events such as bankruptcy: the Supplement amends the Definitions to include language that only an admission in a judicial, regulatory or administrative proceeding or filing would constitute a Credit Event trigger
· Change in currency or composition of any payment of principal or interest that can trigger a Credit Event under the Definitions: the Supplement modifies the Definitions to address certain changes in currency or composition of any payment of principal or interest so that a change to a “Permitted Currency” does not constitute a Restructuring Credit Event.
Additional details on all three issues can be found in the Supplement and its Commentary, which can be accessed under the What’s New section of ISDA’s web site: www.isda.org.