2007 LCDS Protocol
The purpose of the LCDS Protocol (the “Protocol”) is to facilitate the amendment of documentation for loan CDS transactions that reference the Syndicated Secured Loan Credit Default Swap Standard Terms Supplement published by ISDA on June 8, 2006 (the “Old LCDS Terms”). The Old LCDS Terms were replaced by the Syndicated Secured Loan Credit Default Swap Standard Terms Supplement published on May 22, 2007 (the “New LCDS Terms”). The amendments effected by the Protocol will update loan CDS transactions documented under the Old LCDS Terms by migrating them to the New LCDS Terms.
The update is in two parts: (1) incorporating the New LCDS Terms in place of the Old LCDS Terms; and (2) adopting the new form of Syndicated Secured Loan Credit Default Swap Physical Settlement Rider published by The Loan Syndications and Trading Association, Inc. as of June 18, 2007.
The Protocol will apply to all transactions that incorporate the Old LCDS Terms, regardless of the date such transaction is entered into (unless the relevant Confirmation contains sufficient language to exclude the effect of the Protocol in accordance with Section 5(b) of the Protocol). The Protocol will also apply to any when-issued loan CDS transaction having a Trade Date prior to May 22, 2007. These transactions are separately included to ensure that if the parties did not expressly state which version of the standard terms would apply, then the New LCDS Terms will apply to that transaction.
Some of the substantive changes between the Old LCDS Terms and the New LCDS Terms that will be effected by the Protocol are as follows:
It should be noted that there is no adherence fee required for ISDA members or non-ISDA members submitting Adherence Letters in connection with the LCDS Protocol.
The LCDS Protocol is open to ISDA members and non-members. The Protocol was originally open between July 24, 2007 and August 24, 2007. This period has been extended until September 14, 2007, in order to maximize the number of adherents to the Protocol.
PLEASE NOTE: THIS PROTOCOL IS CLOSED.
|The following documents must be submitted via email to the ISDA office in New York in order to adhere to the LCDS Protocol:
ISDA will only accept email delivery of Adherence Letters. An Adhering Party is not required to send original Adherence Letters to the ISDA offices.
Please submit all Adherence Letters via email to firstname.lastname@example.org. It is critical that both a scanned, signed Adherence Letter, as well as a scanned, conformed Adherence Letter is submitted. Entities will not be deemed to have adhered to the Protocol until both the signed and conformed Adherence Letters are submitted by email in accordance with the Adherence Period.
No other documents are required in order to adhere to the LCDS Protocol. Supporting documentation, such as board resolutions or a list of authorized signatures, can be provided and will be held in safekeeping by ISDA, but it is not necessary to submit such documents in order to adhere to the Protocol. Access to supporting documentation will only be provided if requested in writing.
The Protocol will open for adherence on July 24, 2007.
Email address for Delivery of Adherence Letters:
Policy Regarding Conformed Copies
The most common problem experienced in the adherence process for prior Protocols was the failure to include a conformed copy of the Adherence Letter. We remind parties that a conformed copy, together with a signed copy, must be submitted to ISDA in connection with adherence to the LCDS Protocol.
Frequently Asked Questions
ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the LCDS Protocol (the “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 PROTOCOL. PARTIES SHOULD CONSULT WITH THEIR LEGAL ADVISERS AND ANY OTHER ADVISER THEY DEEM APPROPRIATE PRIOR TO USING OR ADHERING TO THE PROTOCOL. ISDA ASSUMES NO RESPONSIBILITY FOR ANY USE TO WHICH ANY OF ITS DOCUMENTATION OR OTHER DOCUMENTATION MAY BE PUT.
Adherence Letter Submission Process
How do I send in my 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?
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?
What if I am an investment or asset manager – how do I complete the signature block?
Can I change the text of the Adherence Letter?
Does it cost any money to adhere to the Protocol?