2008 Washington Mutual CDS Protocol
The 2008 Washington Mutual CDS Protocol (the “Protocol”) relates to settlement issues concerning Washington Mutual Inc ("Washington Mutual"), that filed for Chapter 11 Bankruptcy Protection on September 26, 2008 EST (September 27, 2008 GMT). The purpose of the Protocol is to offer market participants an efficient way to address the settlement issues relating to credit derivative transactions referencing Washington Mutual. The Protocol will offer institutions the ability to amend their documentation for various credit derivatives transactions in order to utilize an auction scheduled for October 23, 2008 to determine the final price for certain Washington Mutual bonds. Markit Group Limited and Creditex Securities Corp. will administer the auction.
The 2008 Washington Mutual CDS Protocol is open to ISDA members and non-members. The Protocol will be open between October 15, 2008 and October 20, 2008.
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 2008 Washington Mutual CDS 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.
Click here for the form of Adherence Letter.
Please submit all Adherence Letters via email to WaMuprotocol@isda.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.
You are not required to send your original Adherence Letter(s) by mail to ISDA.
No other documents are required in order to adhere to the 2008 Washington Mutual CDS 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 Wednesday, October 15, 2008.
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 2008 Washington Mutual CDS Protocol.
ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the 2008 Washington Mutual CDS Protocol (the “Washington Mutual 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 WASHINGTON MUTUAL PROTOCOL. PARTIES SHOULD CONSULT WITH THEIR LEGAL ADVISERS AND ANY OTHER ADVISER THEY DEEM APPROPRIATE PRIOR TO USING OR ADHERING TO THE WASHINGTON MUTUAL 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 Washington Mutual CDS Protocol; and (iii) questions relating to the substance of the Washington Mutual CDS Protocol itself.
Adherence Letter Submission Process
How do I send in my Adherence Letter?
What is a conformed copy?
Who is an authorized signatory?
What if I am an investment or asset manager – how do I complete the signature block?
As an alternative, an investment or asset manager may list the specific funds that are adhering to the Protocol, by indicating in the signature block: “Investment/Asset Manager, acting on behalf of the funds and accounts listed below”. Click here for example. Please note that in this case the names of those funds will be publicly disclosed on the ISDA website.
Whichever method is used, 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 Washington Mutual CDS 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 Letter?
Do I need to reference a DTCC number on the Adherence letter? What are the implications if I do not?
Does it cost any money to adhere to the Washington Mutual Protocol?
Entities Electing Not to Adhere to the Washington Mutual CDS Protocol
Scope of Transaction Coverage Relating to the Washington Mutual Protocol
Does adhering to the Washington Mutual Protocol affect other credit derivative transactions?
What credit derivative transactions are not affected by adhering to the Washington Mutual Protocol?
When is the auction?
Physical Settlement through the Auction
If I want to deliver Deliverable Obligations in a currency other than USD, how is the FX calculated?
Cash Settlement Date and Accruals
How are accruals calculated?
(A) The Fixed Rate on the Washington Mutual Portion shall accrue to and including the Common Event Determination Date (September 29, 2008) and (B) the resulting Fixed Amount in respect of Washington Mutual shall be paid on the Cash Settlement Date. For example, in transactions for which September 22, 2008 was a Fixed Rate Payer Period End Date, the Fixed Rate on the Washington Mutual Portion would accrue from and including September 22, 2008 to and including September 29, 2008, being 8 days' accrual.